Digital technology company Trovio has completed a $6.25m capital raising and is poised to roll out its blockchain-based business solution for the precious metals industry to other commodities and traded metals.

Formerly known as InfiniGold, the company is currently going through a rebranding to more accurately reflect its technology roots and its capital raising attracted significant interest from a number of venture capital funds out of Singapore and Switzerland, and a Hong Kong-based family office.

“We decided the name of InfiniGold really didn’t suit what we’re after as we are really a technology company and not a gold company,” said Trovio chief executive, Jon Deane, a former head of commodities trading at investment bank JP Morgan.

Another reason for the name change is the company is becoming more active across the precious metals space and in metals other than gold.

“The original business InfiniGold was incubated out of the CMCRC, based in Sydney, now the RoZetta Institute, which is a technology research centre funded by government, industry and universities,” said Deane.

The institute launched a number of commercial projects and market-based businesses from the early 2000s of which one, a company called Smarts, was eventually sold to NASDAQ for $100m and is a leading markets surveillance solution.

Digital technology applied to gold trading

Another institute-born business is Digi Cash which provided the underlying technology for Trovio’s digital trading platforms that facilitate a change of ownership title to products such as precious metals.

Digi Cash is a system for digitising currency using encrypted files to produce electronic cash.

“We ported the technology from Digi Cash where we actually digitised Australian dollars well before blockchain with the Reserve Bank of Australia’s approval,” said Deane, who is also a part-owner in a cryptocurrency hedge fund.

“We looked at the technology and said while it’s great for currency, digital currencies aren’t really there yet, but it’s a really unique way of doing title transfer and digitising physical assets,” said Deane.

The company has a relationship with the Perth Mint and started a conversation about it using Trovio’s technology to provide a unique way of taking any physical asset and digitising it in a cryptographically secured way as a digital token – a kind of unique digital certificate.

By digitising a physical asset, it can become infinitely fractionable; that is, broken down into smaller units, allowing it to be sold via Trovio’s Gold Pass App or traded on a public blockchain.

An example of this is the Perth Mint Gold Token which allows parties to move their physical gold metal and take delivery of it anywhere in the world using Trovio technology.

“We can move physical metal from being in a vault to a digital certificate on to the blockchain to creating all sorts of trade finance solutions on the back of that, to taking physical delivery of the metal anywhere in the world,” he said.

“Because the token is infinitely fractionable it acts just like currency,” Deane said.

The digital token allows an individual gold holding to be broken down into smaller units, much like a single Bitcoin is divisible into 100 million Satoshis, which is difficult to do to physical gold.

“Each token effectively has a unique identifier which can track all the way back to an allocated gold bar,” he said.

The company also licences its digital technology to other countries and sales for the gold token business have increased by 400% on a year ago.

“We also have a digital market-making business which moves liquidity from refineries to other market players,” he said.

The company has other digital-based products such as CommoditiesPass and a commodities trading platform.

Digitising the commodities industry

“I say we are on the cusp of quite a big evolution around decentralised financing in the commodities industry, reducing operational risk, reducing credit risk, and creating new solutions for people who didn’t have access before,” said Deane.

“What we do with our technology is we disintermediate a lot of the financial service layer that is currently wrapping products, and we can enable people to go direct to market.

“By having that token solution, you can now seamlessly integrate with other trading platforms without having to build all these new pipes or layers of technology,” he said.

“The shining light of gold is that it is a proven store value. Bitcoin is the leader within the crypto universe, and its utility is definitely as a store of value and potentially a payments system,” said Deane.

“But I don’t think we actually see a significant shift from gold ownership into Bitcoin because you will need to see central bank adoption as a store of value to really move the needle for Bitcoin,” he stated.

Deane believed that there will be more headlines about large companies like Tesla and MicroStrategy buying Bitcoin for their corporate treasuries.

“There is a pretty big loss of confidence in the US dollar as a reserve asset and probably all fiat currencies in general that are operated by central organisations.

“Both gold and Bitcoin are decentralised assets and by the nature of them there’s no controlling body that controls their supply.

“People and companies are turning to gold and cryptoassets as a store of value because of a loss of confidence in government fiscal policy and central bank monetary policy,” he said.