Why GoldPesa Wants To Set Up Academy In Kenya

Yadav Jani, the Co-Founder, GoldPesa is a renowned Fintech and Blockchain Expert with over 15 years of experience in East Africa and global markets. The techpreneur has also invested in various tech businesses, sports leagues, and global investment funds such as Whitebeard Fund.

He describes GoldPesa which was recently launched in Kenya as an advanced form of money. A store of value that gives customers the opportunity to not only save money and hedge against inflation but to earn a premium on their gold holdings.

GoldPesa trades in the global forex exchange market where it invests 50 per cent of all fees in a brokerage account managed by the PAWN, a proprietary trading algorithm. Profits generated by the PAWN are used to buy back and burn GoldPesa tokens from the market, which rewards token holders by creating demand and reducing supply at the same time. This model, according to Yadav, creates earnings on an asset class (gold) that generally does not have any earnings. In an interview with CIO Africa, he shared how the platform works, issues affecting the digital asset ecosystem and why the company is keen on setting up an academy in Kenya.

Question: How does GoldPesa Operate?

Yadav: For you to trade on GoldPesa one has to acquire GoldPesa Token Option. The GoldPesa Option token is an exotic option with a moving strike price. Each GPO token represents an option to purchase 1 GoldPesa (GPX) token at spot gold price + 1 per cent. Every GPX token is 100 per cent backed by 1 gram of 0.995 pure gold. As a derivative of GPX, GPO can generate 100X returns for token holders based on intrinsic value rather than sheer speculation. GPO enables GoldPesa to incentivize strategic partners to accelerate growth.

Q: Why is GoldPesa a viable investment in the current financial market challenges?

With the negative impact of the COVID-19 crisis and unprecedented monetary and fiscal response, many investors have turned their attention towards hard assets such as Bitcoin and gold. In the last 24 months, the price of gold has approximately increased by 35 per cent. Given the current financial uncertainty many analysts are forecasting that gold will set a new all-time high.

Alongside this increased demand for gold, interest in gold-backed digital tokens, which can be transacted and stored on cryptocurrency exchanges and wallets, has also grown. Since September 2019 a number of new gold-backed tokens have been issued from established crypto companies, such as Tether, Paxos, and Blockchain.com, and the total value of gold-backed tokens has grown by over 16 times in the past year to more than $301 million in value.

Q: What’s your view on government regulation of the digital asset trading market? Is it a positive or negative thing?

Yadav: Regulation, when you delve into it, is primarily based on the need to tax. When a company is regulated, it is brought within the tax network. I don’t view this as inherently negative because every country needs to tax its people to generate revenue for necessary purposes.

Regulation has the added benefit of ensuring that companies behave in a certain manner. Cryptocurrencies do require regulation. This means that governments need to prevent companies from misusing people’s money and engaging in unauthorized investments. Take the case of FTX and Sam Friedman, for example. If they had been regulated, they might not have engaged in the actions they did. However, it’s important to note that regulation doesn’t necessarily prevent every company from going rogue, but it does provide a certain level of consumer protection.

Regarding the introduction of the 3 per cent tax on transactions involving digital assets in Kenya, my position is simple: tax it, but more importantly, the government needs to understand it. Moreover, the Kenyan government should first establish a legal framework for digital assets.

Q: Governments around the world have responded to cryptocurrencies by introducing Central Bank Digital Currencies (CBDCs). Are CBDCs a threat to companies like GoldPesa?

Yadav: No, CBDCs are based on the stability of existing country currencies, such as the Kenyan shilling. They essentially tokenize what already exists.

In fact, on the contrary, as countries start implementing CBDCs, other nations will have a way to access their inventory. They can gain knowledge about a country’s assets, including sovereign wealth, which traditionally were kept private. If another country possesses this information, they can exploit it because it becomes recorded on the blockchain, which is an open book. The advantage of CBDCs lies in their potential to enhance tax collection and efficiency.

Q: What is the best approach for governments to collaborate with digital asset investors like yourself?

Yadav: If the Kenyan government is serious, its first step should be to create a forward-thinking digital asset task force that should focus on establishing a favourable legal framework for trading of online assets. Kenya can become a leader in this field because the country has a highly intelligent population that has already shown interest in cryptocurrencies, as indicated by available statistics. By setting up a designated zone and inviting international companies to establish a presence in the country, there is much that can be achieved. We need to embrace crypto beyond just considering it from a taxation perspective. While taxation is important, we should also foster its growth by providing incubation and support.

Q: What contingency plans have you implemented to ensure that negative news doesn’t result in your platform’s collapse?

Yadav: That’s a great question. Our objective is not solely to sell GoldPesa, but rather to educate people. The best way to educate individuals is by establishing a proper academy. We are currently in the process of setting up an academy that will teach people about blockchain technology, digital assets, and GoldPesa’s role within the larger ecosystem.

If I have 100 people in a room and attempt to sell GoldPesa, only 5 may buy it. However, if I have 500 people in the room and educate them about GoldPesa, 90 people may be inclined to purchase it. Our plan is to create an academy where we initially bring in students who will later become coaches, going out into their communities to teach others about understanding crypto and what GoldPesa offers.

Remember, GoldPesa occupies a crucial position within the token asset digital system. It is neither a stable coin nor like other cryptocurrencies such as Bitcoin, where the value can fluctuate significantly within a few days. GoldPesa is gold-backed and offers a yield. If the yield proves successful, the token will thrive, and the yield is indeed working. By saving money in GoldPesa, individuals can take comfort in knowing that, at worst, their savings will remain stable alongside the price of gold. If all goes well, their savings will grow well beyond inflation.

Q: Who is your target market, and do you have a specific number of people you aim to reach within a given timeframe?

Yadav: GoldPesa was not created for the purpose of enriching the wealthy. It was designed so that an average Kenyan with $100 in their Mpesa account can think, “Let me save $10 of this in GoldPesa, with the hope that in two years, it may be worth $20 or $30.” It offers an opportunity for gradual and substantial growth.

Although I haven’t discussed specific numbers with my co-founder and CEO Shamik Raja, I can confidently say that we are taking a systematic and strong approach to education. Our focus is on educating, not just selling. If we can educate 10,000 people about GoldPesa in the first year, that would be a job well done on our part.

Our target market is not limited to Kenya; we are also looking to expand into other countries. We initially launched in Kenya to demonstrate that GoldPesa is for people in developing countries. We are coming to Africa to assist the unbanked in transitioning to a digital platform, where they can download an app and invest their extra cash.

Q: Given the prevalence of fraud in the digital asset trade, how do you differentiate legitimate platforms from fraudulent ones?

Yadav: Detecting fraud is based on various signals. Firstly, it’s important to examine how the founders distribute the tokens. For instance, if they issue 5 million tokens and the founders and team retain one million of them, while having the ability to sell the tokens at any time, that should raise concerns. It could indicate a potential “pump and dump” scheme, where clever marketing tactics are used to inflate the token’s price before suddenly dumping it. Secondly, it’s crucial to investigate the backgrounds of the founders. Do they come from reputable backgrounds? Do they have a local office where users can address their complaints? These factors can help distinguish legitimate platforms from fraudulent ones.