The domain of fine jewelry often blends contemporary elements with timeless classics and enduring quality. Such fusion is rare in the world of investments. But things have changed recently.
Gimbutis has become the first ever well-known luxury jewelry brand to tokenize precious metals and offer contemporary ownership for modern investors.
DailyCoin talked to Romas Gimbutis, the CEO and founder of Gimbutis, about its newly-issued digital coin and how innovative technologies have modernized the conservative ways of storing value.
Not All Safe Havens Are Easy to Sell
Precious metals, such as gold, silver, platinum, and palladium, have been valued for their intrinsic worth for centuries and have often been seen as a haven for investors during times of economic uncertainty.
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But as the precious metal investment market closely follows established practices, it remains relatively conservative and is late to offer methods of investment that meet the needs of investors nowadays, says Romas Gimbutis.
In the meantime, being a fine jewelry seller himself, Gimbutis witnesses the demand for time-tested investment assets. According to him, risk-averse investors worldwide search for assets that will retain their value through the years.
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“People buy fine jewelry as an investment. It appears as a long-term investment, but eventually, we attach a sentimental value to it. It becomes hard to separate with the piece of art that carries deep emotional significance, memories, and stories and sell it,” notes the jewelry expert.
Aware of the emotional value of jewelry and the difficulties when separating from it, Gimbutis came up with a less sentimental and more practical way to preserve wealth during inflation.
Being a firm believer in blockchain and digital innovations, he merged classic and modern, this time by tokenizing silver.
Modernization of a Conservative World
Tokenizing precious metals is rare for jewelry brands, explains Gimbutis. Traditionally, they offer luxurious jewelry items as a classical form of investment. However, in today’s digital and AI-driven era, there is a growing demand for contemporary options that allow investors to diversify ways of storing value.
With this in mind, Gimbutis became the first in the industry to launch its branded digital currency, Gimbutis Coin (GXAG). The coin is unique in how it is backed with investment-grade silver, whose reserves the company stores in its vaults across multiple countries.
“Gimbutis Coin represents a certain amount of physical silver, which is already stored in our fully-insured and secured vaults. People can redeem digital coins into silver bars anytime. We don’t sell any GXAG, which is not backed by silver, physically lying in our possession,” explains the man behind the Gimbutis brand.
Each coin equals one troy ounce (31.1 g) of investment-grade silver, which can be withdrawn in silver bars from the company’s vaults or kept there for custody. These tokenized precious metals also come with other benefits.
According to Gimbutis, digital coins representing ownership of precious metals are blockchain-based and offer decentralized and immutable record-keeping. This allows for transparent transaction tracking and reduces the risk of fraud or manipulation.
Tokenization also enables the diversification of investment portfolios.
People buy stocks of silver or gold mining companies, but these procedures take time, and stock markets do not work on the weekends. Digital assets are traded 24/7.”
Gold for the Jewelry, Silver for the Vaults
Silver and gold have been popular investments for hundreds of years. The precious metals have likewise inspired hearts and minds when forged into creative works of art.
Luxurious jewelry pieces bearing Gimbutis’ name are renowned globally for their distinctive pine cone symbol inspired by the Cortile della Pigna in Rome. The shapes of the iconic pine cone statues in the Vatican are crafted using opulent materials such as gold, platinum, and precious gemstones.
“Gold is an excellent choice for jewelry due to its natural beauty, durability, and enduring value. It makes jewelry pieces luxurious, expensive, and not for everyone,” says the founder of the fine jewelry brand.
On the other hand, he admits that silver is often considered a better choice for investing as a store of value than gold. According to Gimbutis, silver is less expensive and has more industrial applications, creating demand and impacting its price.
“I think silver is undervalued. It is used and needed in technologies, electronics, solar panels, and even for making medical equipment. Silver is much more liquid than gold and also much cheaper.”
The existing demand plays a significant role in driving asset prices up, creating opportunities for higher returns in the short and long term.
According to Gimbutis, the fundamental features of silver make it an attractive speculative asset. However, when combined with the capabilities of blockchain, the precious metal becomes accessible to an even wider range of investors.
Blockchain Enables Transparent Tokenomics
Being a firm believer in decentralized and open-nature blockchain, Gimbutis is confident that it acts differently from the existing financial systems and thus reduces systemic risks, like the lack of transparency.
“Financial systems are secretive. They do not disclose all details. We don’t know how many dollars there are printed in total. The lack of transparency can mask true financial health. When you do not know all the facts, it’s difficult to identify potential vulnerabilities and fully trust in something. With blockchain, it’s different, as it allows you to track any single move of the assets you purchased. It makes many things much easier for the investors,” says the Chief of Gimbutis.
For this reason, Gimbutis Coin, which is built on the Ethereum (ETH) blockchain, maintains a transparent record of all its activities on a publicly accessible digital ledger that is open to investors.
Each coin represents one troy ounce of silver (31.1035 g) and is directly tied to the real-time silver’s price.
They are only minted when the equivalent batch of silver reaches the vaults of the company’s boutiques in Geneva, Dubai, and Vilnius.
“As it’s all new for us yet, we start with a smaller initial supply of 3,215 GXAX. It’s the equivalent of 100 kg of investment-grade silver. When purchased, investors can transfer it to their ERC-20 compatible wallets or request redemption to the physical silver, which we will gladly send them.”
According to Gimbutis, the new coins will be only issued when the latest batch of physical silver reaches the company’s highly secured and audited vaults. Gimbutis Coin does not give investors any governmental rights except the proven ownership of the physical silver.
A Custodian Who Challenges Banks
Investment in silver is an appealing way to diversify a portfolio, but it also comes with numerous challenges. As a physical metal, silver is a heavy material that is vulnerable to theft and requires a secured space to store it.
But not all investors are willing to store silver bars by themselves. Consequently, finding a proper custodian to ensure the secure and lawful storage of metals is critical. Entrusting precious metals to a custodian requires a high level of trust, says Gimbutis.
“For custody in Swiss banks, you must first open an account. This takes time, and you never know if you can get through the complex documentation procedure. Besides that, using banks’ vaults often come with significant fees. This is a lot for many investors,” says the founder.
He sees private custodians, like his company, as an alternative to the big banks. Trusted private custodians also ensure rigorous security protocols, surveillance systems, access controls, insurance, and audits to protect assets stored in their vaults.
Investors can even watch the vault live on camera whenever they wish, reveals Gimbutis. He adds that private custodians often apply lower prices and offer more flexibility.
Tokenization Represents the Future
As the world changes, even the most conservative markets must adapt to move forward. Timeless classics will always find a special place in our lives, believes Gimbutis, but it can be even more beneficial when merged with the efficiency of modern and innovative technologies.
“A jewelry brand that tokenizes precious metals to offer a new way of investment might sound bold and unusual today. But I am pretty sure that we won’t be the only ones in this tomorrow,” concludes the expert jeweler.
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