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DIGITALGOLD

There are only a handful of knowledgeable digital currency operators in the world.
These are the pioneers with a decade or more of hands-on experience in storing
bullion, securing the privacy of user accounts and navigating the everchanging
regulatory landscape. Bill Cunningham is one of these special few.
Were talking today to Bill Cunningham
President and CEO of Global Standard. Weve
published a couple of his press releases over
the last two months and thought this would be
a good chance to sit down and find out what
Global Standard is all about. Bill, thank you
for taking the time to talk with us.
Its my pleasure, Carl.
On the surface, Global Standard is a payment
system but it appears to be much more. What
exactly is Global Standard?
We are a payment system but, but under the hood,
we are much more than that. What weve actually
done is launch a private-sector monetary authority
and issued a private currency that is valued in
and 100% reserved by physical gold. This model
is significantly more dynamic and beneficial
over time than only being a payment system,
but clearly, it also brings enormous benefits
to online payments. And interestingly, Global
Standard is the first and only licensed financial
institution explicitly authorized to issue a goldbacked alternative currency and to administer
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Digital Gold Magazine | September 2016

the innovative payments platform via which it

circulates.
Tell us what makes up a private-sector
monetary authority.
Carl, as you know, most money in the world,
in fact pretty much all real money, is issued
by governments either through a central bank
or currency board. This system has obvious
advantages, most notably the safety and security
of the currency being backed by a recognized
central authority. Advantages also exist, however,
for a private sector initiative. There are, however,
also large challenges to overcome for a private
company to issue money assuring a level of
safety and security comparable to what a central
government provides. Weve implemented a
model that overcomes these challenges.
What are the distinctions with your monetary
authority that make it viable?
There are a number of things, let me go through
them.

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First of all, a fundamental imperative is to assure
freedom from default risk. Weve implemented a
number of controls and processes to achieve this
requirement.
The currency which circulates on the Global
Standard Platform has a 100% reserve of physical
gold. The gold is actually owned, by a special
purpose trust the Global Standard Bullion
Reserve Special Purpose Trust for the sole
purpose of being a reserve. The gold cant be used
for any other purpose; it cant be leased, it cant
be loaned, it cant be used as collateral it can
only be used as the reserve. And Global Standard
is contractually bound to this arrangement and our
liability.
Were utilizing the existing global gold
infrastructure including the London Bullion
Market Association and COMEX in the United
States to ensure we are dealing with Good
Delivery gold thats held in a proper custodial
chain. The gold is physically stored in treasury
grade depositories.
Regardless of whatever may happen to the
company, by its own actions or by a third-party,
the gold remains secure so that if necessary it can
be liquidated to return national currency to all
holders of AUG, AUG being the designator for
the gold backed currency which circulates on the
Global Standard Platform. It is free from default
risk.
Second, we have to make sure that payments
are final and not subject to reversal. So we
implement rules and system protocols that require
an account have an adequate balance before it
can initiate a payment and that payment, once
committed, cant be pulled back or defaulted on
by the payer.
Its also very important to mitigate the type of
risks that occur with any private business venture
that generally do not exist when youre dealing
with the central government. To this end, the
protocols, business processes, and assignment

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of responsibilities in the system are very

meticulously designed to eliminate as many of
the business risks as possible so as to keep the
settlement platform where AUG circulates as safe,
secure, and risk-free as possible.
Also, its vitally important to ensure that
everything is governed by contract for all parties
using the global standard system. Our company,
our members, are partners who perform the
primary dealer function and organizations who
conduct exchanges, or any other ancillary services
that are offered in conjunction with the platform
are all bound by contract enforceable in a court of
law.
This certainly is more than a payment system.
Im understanding the longer term effects.
We truly have implemented a system that can
serve as a global currency, that mobilizes the
value of gold and circulates easily across borders
electronically.
The settlement platform is centralized and it is
closed. The only currencies that circulate on it are
ones in which we have a contractual obligation or
in which we have a contractual relationship with
the issuer. At this point in time, the only currency
is AUG which is backed by gold which we also
issue. Any money circulating on the settlement
platform can only exist on the platform. Value
cannot directly enter or leave the system.
Lets go back to daily use, how do we benefit?
What this does for payments is really significant.
Payment systems today are generally too slow,
uncertain, and costly. Internationally theyre very
inefficient. And a growing concern is developing
with consumers afraid to share personal
information they dont want to have credit card
information or personal identities stolen.
The fact that Global Standard payments are
final and immediate is a great benefit to the
recipient. They get their value immediately and
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DIGITALGOLD

it cant be pulled back. To online retailers or

any organization accepting funds electronically,
this eliminates the possibility of chargebacks
which could be a significant positive impact on
a companys bottom line; and they dont need to
wait to have the value theyve been paid.
The centralized system and the protocols in place
also make this a very efficient payment system
and the efficiency translates to low-cost. As an
example, lets compare Global Standard to a
credit card as a method of buying something
online. The credit card is typically going to
cost the payment recipient 2 - 3% or more in
processing fees. For your typical online purchase
of around $100, the Global Standard fee is 1%
and as the value of the transaction goes up the
fee actually reduces as a percentage. At $5000
credit cards still cost 2 - 3% and up. The Global
Standard fee will be a little bit over .1%. Thats
a significant advantage when these lower costs
translate to much higher profitability for online
retailers. Weve modeled a number of these online
retailers, and by accepting only a relatively small
portion of their payments with Global Standard
weve been able to see where bottom lines can
be improved 15, 20, 25 percent or in some cases
even more. For a non-profit, for a charity, if they
can put more into the charitable works as opposed
to paying for the payment that is significant.
This all sounds good for someone receiving
a payment, what about someone making a
payment?
All of these benefits I just discussed are very
good for the recipient but the benefits are also
there for the person making a payment especially
individuals. Individuals can now hold some value
in gold but have it in a liquid form so that they
can make payments online. They can purchase
things, spend to friends and family or use it for
any other reason they may want to send somebody
money. Very importantly, today when you make
a payment online you typically have to give up a
lot of personal information including your name,
address, credit card number, and the security code
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Digital Gold Magazine | September 2016

from your credit card. This information then sits

on a server somewhere and all too often is stolen.
Ive read that 30%, maybe as much as 50% of the
people who are online will not transact online for
fear of losing their information or even having
their identity stolen. With Global Standard the
payment takes place on the platform, theres no
need to divulge this information every time you
make a payment. A merchant never sees your
personal information as part of a payment. Not
only does this help the individual, but think of
the larger market if more people are willing to
make payment online using Global Standard since
so many people today will not make a payment
online for fear of losing credit card or personal
information, Im seen some reports that this
number is 30% or more what an untapped online
market.
This all seems to work well domestically, what
about international payments?
All of the advantages domestically also apply to
international payments; the same speed, finality
of settlement, and low cost. The currencys gold
value is relatable to any national currency and is
universally appreciated as money.
As we obtain all of our licenses in the U.S. we
will begin to expand internationally starting
in the UK where we already have a licensing
opinion from the Financial Conduct Authority
that allows us to operate now. The UK market
will be followed by the rest of Europe and
other countries. We have a number of strategic
discussions underway, that as they develop, will
guide our priority as to where to go next.
One area we see as being very important is
international remittances. We bring significant
advantages to that $600B market area.
Remittances are extremely important to many
Third World countries. In many cases, theyre a
tangible part of a countrys GDP. The cost and
the timeliness of getting those remittances back
to families are currently far higher than what
authorities would like them to be. The World

DIGITALGOLD
Bank has set up an objective to reduce costs
by 50% from what exists today. Once Global
Standard is able to enter this market we can, in
fact, reduce current costs by 50% or in many
cases more. Payment with Global Standard also
takes place immediately so there is no delay
in money getting back to family members.
The savings can be so significant that in some
countries they, could have a noticeable impact
on a countrys GDP and GDP growth typically
translates to reductions in poverty clearly in our
long-term mission
Internationally Global Standard is good for
businesses. Even the big guys have to go through
the banking system and very few have access to
international settlement platforms. With Global
Standard, everybody has direct access to the
settlement platform which greatly simplifies
international payments
This is an enormous idea, Bill, tell us how you
came up with it?
I think the background here is very significant.
Youre quite familiar that e-gold was forced to
cease operations back in 2009 after they pleaded
guilty to operating without money transmitting
licenses. When it became apparent to the e-gold
ownership that they would not be able to get the
necessary licenses to continue doing business
as the court indicated they could, they began
looking for options for the future. I was able to
provide one where I put a group together to buy
the intellectual property. The e-gold system was
built on the same monetary concepts of Global
Standard. The e-gold team, primarily Dr. Doug
Jackson, worked to upgrade the intellectual
property to meet the necessary regulations and
include later generation software and technology.

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without money transmitting licenses and one

count came along for money laundering. The
court very clearly said that the system wasnt
illegal and should be given every chance to
operate, and noted Dr. Jackson had respect for the
law but was given poor legal advice. The court
documents laid out very specific information on
how it should proceed going forward so that it
would meet all of the regulatory requirements.
We are clearly not bound to the stipulations of the
plea agreement, but we made a very conscious
decision to follow those guidelines because we
thought that by taking regulatory compliance to a
higher degree we could provide a safer platform
for our customers.
So what weve done with the e-gold and now
Global Standard intellectual property was to
implement it using state-of-the-art software
technology. Weve also implemented an antimoney-laundering program that is significantly
more thorough and rigorous than any youre going
to find from any other money services business
in the US or globally and much more like the
best practices from the banking industry. Again,
we think having the safeguards in place creates a
much safer environment for all of our customers.
Weve also worked all the other regulations
relative to privacy, consumer protections, and
different regulations imposed by different
jurisdictions. We have gone the extra mile to
make sure were compliant.
Add all this to the fact that e-gold was successful
reaching $3B in annualized payments and with
a $75M gold reserve. Dr. Jackson is a consultant
to Global Standard so we have the advantage of
having the smarts behind the intellectual property
available. We are able with his help to capitalize
on the lessons learned, good and bad, from 20
years in the business.

e-gold took a reputational hit because of the

court case, you dont seem to see this as an
issue.

Youve launched the system. Where are you

now in your progress?

The exact opposite is true if you go look at what

actually happened. e-gold pled guilty to operating

We did launch to the public in late May and then

in early June made the formal announcement. We
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DIGITALGOLD

are licensed or have been told we do not require a

license to do business in 35 states plus the District
of Columbia and have two others with approval
expected imminently giving us just over 85%
coverage of the US population. We are continuing
down the path with the remaining states with the
intent obviously to get 100% US coverage. Were
also working ambitiously right now to bring the
system up to Canada where we are registered with
Fintrac, as well as in the UK.
Our next intent is to expand throughout the rest
of Europe and then globally. Where we go next
is dependent upon on-going discussions with
a number of potential strategic partners. How
fast and well those different discussions go will
dictate what our priorities become; whether we go
to Brazil or Malaysia or the Philippines or Mexico
or a host of other locations.
What do our readers need to do to sign-up and
start using Global Standard?
Its quite simple. Go to www.GlobalStandard.com
and click sign-up. Youll need to verify your cell
phone and email, and then go through our identity
verification process, and then your all set to use
the system.
If someone is not a business or doesnt know
others who will give him AUG, how do they get
it?
Now or even later if you want to exchange USD
or another currency as we expand globally, you
can go to an exchange provider who will take
USD in exchange for AUG and the reverse.
These exchange providers are authorized by

Global Standard and are under contract. The first

exchange provider, who is also our first Primary
Dealer, is Fidelis FX who can be found at www.
fidelisfx.com . You can login to their site via a
federated login with Global Standard, link a bank
account, and buy some AUG.
You called Fidelis FX a Primary Dealer, what is
that?
I noted earlier we have responsibility assignments
and protocols to minimize risk. A Primary Dealer
is part of this process. It determines the market
need for AUG and to increase circulation it
buys gold and provides it to the special purpose
trust so Global Standard can issue more AUG.
If the amount of AUG needs to be reduced it
spends AUG to Global Standard so that gold
can be released from the trust this process is
extraordinarily well defined and controlled.
Whats next?
The immediate initiatives are bringing more
members to the system including signing
up more businesses. Well be expanding our
geographic footprint as I discussed, and
making improvements and upgrades is an
on-going process.
Bill, I appreciate your time and I wish you
great success. Please keep me up to date.
Thanks, Carl, Ive enjoyed this and I will keep
you up to speed.

https://globalstandard.com

Better Money | Better Payments

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Digital Gold Magazine | September 2016