How Gold Fits Into Modern Portfolios with Ashraf Rizvi, Founder & Chief Executive Officer, Gilded.
Moderated by Anthony Scaramucci, Founder & Managing Partner, SkyBridge.
MODERATOR
SPEAKER
Ashraf Rizvi
Chief Executive Officer & Founder
Gilded
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
TIMESTAMPS
EPISODE TRANSCRIPT
Anthony Scaramucci : (00:07)
What do we have coming out here? Introduce the product that you're bringing out here. What is this?
Ashraf Rizvi: (00:13)
So Anthony, pretty excited to show off something really special that most people never get a chance to see in their lifetime. We got a million dollars worth of real gold coming out and here it comes. So we've got a 12.5 kg bar. That's $750,000 and five little guys, which are 1.0 Kg, each, about $60,000 a piece, right from the vault. There we go. Okay. [crosstalk 00:00:41] Now grab it, you want to grab it?
Anthony Scaramucci : (00:43)
The larger gold? I do want to grab it. Okay guys, ladies and gentlemen enjoy the rest of the conference. I'll see you guys. It's just going to be hard for me to get out of here with this thing though, okay?
Ashraf Rizvi: (00:53)
You can't run with that. Pretty amazing?
Anthony Scaramucci : (00:57)
How much does this weigh?
Ashraf Rizvi: (00:58)
That's about 27.5 pounds.
Anthony Scaramucci : (01:01)
Wow. 12.5 kg, $750,000.
Ashraf Rizvi: (01:05)
Getting the workout in. You can get a few curls in.
Anthony Scaramucci : (01:07)
Yeah if you haven't done a workout in a couple of days, a couple of years. All right, here we go. And what about these? What do these weigh? Thank you, sir.
Ashraf Rizvi: (01:14)
Little over two pounds, about $60,000.
Anthony Scaramucci : (01:16)
So when it says 99.99 that's what?
Ashraf Rizvi: (01:23)
That it's 99.99% pure. So that's why it's got that beautiful shine.
Anthony Scaramucci : (01:30)
Okay. And so that's sort of the purest gold that you can get, that's it? [crosstalk 00:01:35] And this is a representation of $1 million of gold.
Anthony Scaramucci : (01:40)
All right. So before we get into gold and Gilded, sit please, tell our delegates a little bit about your background.
Ashraf Rizvi: (01:48)
Well first I want to just start by saying Anthony, it's great to be on stage, great conference, and excited to be here.
Ashraf Rizvi: (01:55)
So, I feel like I've been preparing my whole life for this opportunity to do what Gilded is doing and what we're building starts with 30 plus years on Wall Street, like you. I had a chance to work for all the big Swiss banks: Credit Suisse, UBS, Swiss Bank Corporation. Run a lot of different businesses, emerging markets, FX, fixed income repo, and probably more importantly, the global metals and commodities businesses. Was fortunate enough to start two successful companies, one in 1986, fresh out of school. And then another one in the heights of the Great Financial Crisis, just like you managed billions of dollars for endowments, foundations, pension funds, family offices.
Ashraf Rizvi: (02:42)
And then there's also a personal story for me. My parents are first generation immigrants from India, and I can remember as a kid growing up, my dad telling me about how he was sending money back home to his family and how expensive it was. The Indian rupee was a 7.5 rupees to the dollar. Gold was at the time 35 bucks to an ounce. Today, of course, we're looking at 74 rupees to the dollar and we're looking at $1800 per ounce.
Ashraf Rizvi: (03:11)
And so as I look back now, after all these years, I see why Indians loved to buy gold because it's been such a great store of value for them. And of course, that's the big topic these days: store of value, given the decline of currencies worldwide.
Ashraf Rizvi: (03:27)
And the last thing is, I think at this stage in my career, I really wanted to do something where I thought I could make a difference and help people, whether it was in terms of financial planning, longterm wealth creation for their family, for their kids, and also making things easy.
Anthony Scaramucci : (03:44)
So gold culturally, 5,000 plus years of history as a store of value. And now you've created a company called Gilded. We have a lot of cryptocurrency people here, digital currency people. And tell us about the intersection, give us the elevator pitch for Gilded.
Ashraf Rizvi: (04:03)
Yeah, so I think the really exciting thing is that we're using blockchain technology, a smartphone and modern day apps to deliver that physical asset in a digital, mobile, and a usable form. And so that means making it functional like money, right? So that's the beautiful thing here is that we can make it such that you can buy it, hold it, store it, send it. We can already do that in 12 countries across the world, instantly 24/7. And then in the future, I'm expecting that we'll be able to add things like spend it through a debit card or credit card or borrow money against it, or even pledge it as collateral, for example.
Anthony Scaramucci : (04:54)
What's the benefit of using gold as a base asset in the crypto space?
Ashraf Rizvi: (05:00)
Yeah, so I would say two things. So one, it's important to know we're not a crypto or a stable coin or in fractional banking. So, and the reason for that is that in our case, we allow you to own that asset directly. It becomes your property, your title. So that's, that's very important. The second part I think is what we talked about, the store of value. This is not about getting rich quick or anything like that. It's about storing and preserving your value. And we all know that inflation has been eating it. Whether it's the dollar or currencies across the world. And I think gold has served that purpose for 5,000 years. And so we're now making that possible that we can bring it into 21st century where we can access it easily.
Anthony Scaramucci : (05:44)
So you've been in the currency space, the commodity space, three decades on wall street. And we've watched an erosion of fiat currency. How does this help against that erosion?
Ashraf Rizvi: (06:02)
So I think if we think about investors everywhere, whether it's the retail person, the hedge fund, the asset manager, the pension fund, the government, the corporation, everybody is faced with this and that today we're earning little or no interest on our currency, but we have inflation of 5%. So we're eroding our value. Gold has over the last 20 years returned about 9% a year. Our interest accounts are earning one and a half percent. Last 50 years, gold has earned 8%. Doesn't seem like it would be that high given it's a non-yielding asset, but money that you kept in the bank only four and a half percent over those 50 years. And so it's providing that protection. It's not fiat and it's no government's liability.
Anthony Scaramucci : (06:50)
When you think of the traditional cash apps versus Gilded, what is the analysis that you would give us there and what's the benefit of Gilded?
Ashraf Rizvi: (07:02)
So the nice thing here is we can make it easy, simple. I have the app and anybody's welcome to come by our booth. You can sign up, create an account, literally in five minutes, complete the whole KYC AML process. So we're very focused on good regulatory compliance, but you can do it in matter of minutes. Think about how long it takes to open a bank account. We don't have any of those problems and you can make a purchase with your debit card, credit card, or even through your bank account and you're off and running. And now you've got your store of value and independently audited verified and see even that you can actually see the bar that you have and that you own right on your app.
Anthony Scaramucci : (07:44)
So everybody talks about the future of smart wallets. At some point on our phone a secure, smart wallet, it'll have, perhaps some cryptocurrencies, maybe a fiat currency that's been digitized. Do you see Gilded and your digital gold in the wallet? People could transfer in and out of it into other currencies? Is that what you're seeing?
Ashraf Rizvi: (08:06)
I think the opportunity is big on so many different levels. I said, I think right from the beginning, once you digitize it and fractionalize it, which is what we've been able to do, now we can do so many things with it. And I think the really powerful thing, which is that we can make it happen instantaneously. So now we're no longer limited by the banking system. We can operate 24/7 and once other people are on that network and who've gone through the necessary KYC AML process, you can transfer value to them as well.
Anthony Scaramucci : (08:41)
So tell us the vision for the company. How do you see the company evolving over the next five years?
Ashraf Rizvi: (08:49)
So I'm really excited about a whole bunch of things. I think first, probably most important is that we can give people an opportunity to have that store of value and be able to do that easily by leveraging the fact that we're making that physical gold digital, mobile, and usable, and that we're making it your title, your property. And so, as you know, from the great financial crisis, if it's not your title or your property, it's often sitting with somebody else, the bank or some other custodian, and you could be at risk. And so given that a lot of people use gold as that ultimate store of value, you don't want to buy, as I would say, you don't want to buy CDSes on Bear Stearns from Lehman. That's not a good business. So I think that's the most important thing is to give them that store of value.
Ashraf Rizvi: (09:35)
The other is, I think we can do some social good too, which is we can help people who are trying to send money back home, very expensive, 6% on average, we can do it for far less, typically half that price or less, depending on the country involved. We can help in the fact that we can get the asset directly to the person who's intended to be the recipient. And we can also help with things like illicit or nefarious activity, because we're storing all the information on blockchain, so we can trace whoever's the owner of the asset or the product.
Ashraf Rizvi: (10:09)
Not to mention, the big opportunity, which I'm really excited about in the future is the unbanked space. Billion people who don't have access to a bank account. They've clearly been left out of the financial system. We can do something of value for them, too. They have phones, they have smartphones. If we can reach that audience so that they can have that ability to save and store value and create wealth for their family, that's I think a really good thing.
Anthony Scaramucci : (10:36)
We've known each other a long time. I'm obviously very good friends with your brother Suhail as well. You've been traveling the entire world during a pandemic to explain this company to people. What's the in general international reception?
Ashraf Rizvi: (10:54)
So I've been really excited about the fact that we're seeing interest on so many different levels. We started in India, initial beta testing. We've got a few hundred thousand downloads pretty quickly with relatively little advertising.
Ashraf Rizvi: (11:08)
I started showing it to friends, others, and what we've seen is interest now, not just at the retail side, family offices, corporations, financial institutions, and governments who want to leverage our technology for cross border trade or store of value, things that apply to them. And of course, the things that apply for all of them are: one, store of value; two, the ability to actually move value on an instantaneous basis. They care about that. Three, they care about the fact that they can operate on their own terms. They're not limited by the banking system, et cetera. So all of these things matter to each of them, and again, I think this is the beauty of having the asset where it's your title, your property, nobody else's liability, and being able to leverage the fact that you're making it digital, mobile, and usable. Really resonating with people.
Anthony Scaramucci : (12:07)
So some of the largest commodities in the world, like oil, are denominated in US dollars, or sometimes other fiat currencies, but predominantly US dollars. Is that a vision for you that at some point you would be transacting in gold over the blockchain, nations doing that?
Ashraf Rizvi: (12:28)
I think that's exactly where we're headed. I think there's the possibility once you've leveraged that blockchain technology, the mobile phone, and the app, and digitized and fractionalized, the possibilities become so widespread. And so I think that's exactly what, when we're thinking about companies or financial institutions or governments, thinking about is that how effectively they could use it in so many different ways.
Anthony Scaramucci : (12:55)
And how does this differ from cryptocurrency?
Ashraf Rizvi: (12:57)
So I think there's a number of different [video skips 00:13:00] but here, the biggest difference I think, most important is, it's your title, it's your property so it becomes your asset. And so if you think about it like a house or your car, but it goes back to a law which is around bailment, which is about English common law, hundreds of years of history, and only applies in commodities. And it's because it's a real asset and so when we move things, even if it's partially yours and somebody else's. You and I, let's say our tanker, half of it is mine, half is yours. That's bailment. It's similar to a coat check or a valet. When you valet your car, you didn't give that person your car. You expect it back, so that bailment concept is very powerful. It's part of English common law and all around the world. So it makes it your property, your title, your asset.
Ashraf Rizvi: (13:50)
And that's not the case, as you know, with the banking system. It's an IOU, that's fractional reserve banking where a stable coin even is sort of an IOU because they've got the money in a bank, et cetera. So that's really the big difference at the end day.
Ashraf Rizvi: (14:04)
The similarity I would say is freedom from fiat. We also share that vision. We want freedom from fiat.
Anthony Scaramucci : (14:11)
Okay. Ladies and gentlemen, Ashraf Rizvi from Gilded. Thank you very much Ashraf.