Exchange Physical for Digital (EPD) requirements
- Bullion
- Coins and bars
Bullion
Ensuring your bullion meets ABX standards
Deposits must conform with the ABX Quality Assurance Framework (QAF), including, but not limited, to the following:
1. ABX Quality Assurance Framework (QAF)
Physical bullion must have been produced by an ABX Approved Refiner and conform with ABX Contract Specifications and Quality Assurance Framework.
2. Forms of bullion
Physical bullion must be in the form of:
Gold*
1 kg bar of minimum fineness 999.9
10oz Swiss minted bar of minimum fineness 999.9
100 gram bar of minimum fineness 999.9
*Excluding bars produced by Emirates Gold DMCC or Al Etihad Gold Refinery DMCC.
Silver
1kg bar of minimum fineness of 999
100 oz bar of minimum fineness of 999
1,000 oz bar of minimum fineness of 999
3. Chain of Integrity
Physical bullion must be accompanied by conforming Chain of Integrity and Provenance documentation and requirements as per the QAF, including:
A. Each deposit is individually inspected and verified and must be deposited into the Vault Network in one of the following manners:
Directly from an Approved Refiner by an Approved Transport Services Provider
Directly from the Vault Network by an Approved Transport Services Provider
Directly from an Approved Location by an Approved Transport Services Provider
B. Quality Documents represented by:
Refiner Certificate
Refiner Bar List
C. Chain of Integrity:
Original purchase invoice(s)
Storage invoice(s) from date of purchase to present
Vault Network or Approved Location bar list
D. Chain of Integrity must show uninterrupted storage within Vault Network and/or an Approved Location together with any movements between Vault Network and Approved Locations conducted by Approved Transport Service Providers from time of purchase to present.
Coins and bars
The Kinesis gold-based digital currency, KAU, is based 1:1 on 1g 9999 fine allocated gold, and KAG is based 1:1 on 1oz 999 fine silver. The gold behind each KAU is held in any of the approved vaulting locations within the ABX ecosystem and is on an allocated, not segregated, basis.
Users may redeem a minimum of 100 KAU or 200 KAG and thereafter in 100 KAU or 200 KAG lots for physical metal. Users may also deposit metal into the ABX ecosystem and tokenize this metal in a process known as Exchange Physical for Digital (EPD).
The metal which may be deposited must meet the criteria specified within the ABX Quality Assurance Framework (QAF) and also meet the Kinesis product specification criteria which are, in addition to the specifications outlined in the QAF, not be of a pool product other than the specific contract established to facilitate Minting of KAU and KAG, and the metal must be of minimum fineness 9999 for gold and 999 for silver.
There is a desire to facilitate the deposit of gold and silver coins and bars for the purpose of EPD. While there are many coins and bars that meet the specification in terms of fineness, there is a requirement to accept coins and bars into the Kinesis ecosystem that vary from the current 9999/999 rule, which is enforced.
However, in circumstances where the coin or bar deposit is below the fineness of 9999/999, Kinesis has implemented strict rules to ensure that 1 KAU is based on an exact 1:1 allocation of 1g of .9999 fine physical gold and 1 KAG is based on an exact 1:1 allocation of 1oz of .999 fine physical silver, and the integrity of the Kinesis Monetary System is preserved, at all times.
In order to accept coins and bars of varying fineness, while preserving the integrity of the already established format, emissions based on fineness and coin segregation have been implemented. Additionally, there will also be requirements to preserve the segregated status of the deposited coins or bars that the depositor must follow or risk losing the ability to redeem those deposited coins or bars, in exchange for KAU or KAG, in the future. See Rules section.
Kinesis users wishing to deposit coins or bars will need to have their coin and/or gold bar collection assayed at their expense with a service provider of Kinesis’ choosing. The assayer will provide Kinesis with details of the fine weight of the gold contained in each submitted coin and/or bar. Kinesis will only recognise the fine weight of the metal that each coin contains.
To facilitate the deposit of coins of varying fineness, the following EPD emission schedule is in effect:
| Weight in Gold | Fineness | Karat | KAU Emitted |
| 1g | 999.9 | 24.0 | 1.000 |
| 1g | 995.0 | 23.9 | 0.995 |
| 1g | 990.0 | 23.8 | 0.990 |
| 1g | 986.0 | 23.7 | 0.986 |
| 1g | 958.3 | 23.0 | 0.958 |
| 1g | 916.0 | 22.0 | 0.916 |
| 1g | 900.0 | 21.6 | 0.900 |
| 1g | 899.0 | 21.6 | 0.899 |
| 1g | 834.0 | 20.0 | 0.834 |
| 1g | 750.0 | 18.0 | 0.750 |
| 1g | 625.0 | 15.0 | 0.625 |
| 1g | 583.3 | 14.0 | 0.583 |
| 1g | 417.0 | 10.0 | 0.417 |
| 1g | 375.0 | 9.0 | 0.375 |
| 1g | 333.0 | 8.0 | 0.333 |
| Weight in Silver | Fineness | % Silver | KAG Emitted |
| 1ozt | 999 | 99.9% | 1.000 |
| 1ozt | 958 | 95.8% | 0.958 |
| 1ozt | 950 | 95% | 0.950 |
| 1ozt | 947 | 94.7% | 0.947 |
| 1ozt | 925 | 92.5% | 0.925 |
| 1ozt | 916 | 91.6% | 0.916 |
| 1ozt | 900 | 90% | 0.900 |
| 1ozt | 800 | 80% | 0.800 |
By implementing the above emission schedule, the integrity of the original backing parameters is being preserved, while allowing EPD for coins and bars of various fineness.
Through this emission schedule, Kinesis will ensure that each unit of Kinesis gold (KAU) and silver (KAG) is based 1:1 on 1 gram .9999 fine gold and 1oz .999 fine silver. Users of the Kinesis ecosystem will not be adversely affected or experience any ‘dilution’ by undertaking this structure.
All coins and bars underpinning KAU and KAG received from EPD of coins or bars deposited will be independently audited biannually, together with all gold and silver bullion within the Kinesis system. See our audits here.
Rules
1) Redemption
These coins will not be withdrawn unless expressly requested by the original depositor or an authorized representative of the depositor via redemption (the return of the respective number of KAU or KAG to the emission address and the paying of redemption fees). This means that the coins deposited are effectively segregated to the depositor and cannot be withdrawn by other participants. This will remain in effect unless the depositor fails to meet the Balance Maintenance Requirement or fails to pay the minimum segregated management fee.
If a user redeems part of their segregated holdings, the Balance Maintenance Requirement ⅔ watermark is applied to the remaining coins or bars in segregation. There is no maximum, so long as the amount remaining does not fall below the 100 KAU equivalent.
See the Fees page for redemption costs – here.
2) Balance maintenance requirement
In order to preserve the segregated status of the deposited coins or bars, the Balance Maintenance Requirement enforces a minimum requirement on the KAU or KAG balance received from EPD of coins or bars, a depositor must hold in their account as of the last day of each calendar month.
A depositor may liquidate as much of their KAU or KAG balance received from EPD of coins or bars deposited as they wish, so long as their KAU or KAG balance received from EPD of coins or bars deposited, is above the ⅔ requirement stated in the Balance Maintenance Requirement, as at the last calendar day of the month.
Therefore, the depositor may have liquidated up to, and not exceeding, ⅓ of their KAU or KAG balance received from EPD of coins or bars deposited, as at the last calendar day of the month, while maintaining their segregated gold coin and gold bar collection intact.
The Balance Maintenance requirement is checked monthly and if the depositor does not meet this requirement, Kinesis will contact the depositor and inform them they will be given 30 days to top back up to the required level.
If they do not meet this requirement and the top-up warning is met with inaction, Kinesis will have the authority to remove up to 1/3 of the segregated holdings.
The depositor will now have a new watermark set that they will need to maintain at the start of the next month or they may lose segregation of up to another 1/3 of the remaining holdings.
If a user has forfeited the right to segregation due to failure to abide by the Balance Maintenance Requirement a total of 4 times in a 6 month period, the depositor will lose all segregation rights for their total coin holdings.
3) Minimum deposit
For your coins or bars to qualify for EPD you must have a minimum deposit size of at least 3.22ozt .9999 gold, equivalent to at least 100 KAU, or in the case of KAG, a minimum deposit size of at least 200ozt 999 silver, equivalent to at least 200 KAG
4) Fees
There is a 1% deposit fee charged on all coins and bars deposited via the Exchange Physical for Digital (Coins and bars) process.
There is a 2.5% p.a. account management fee, charged monthly at 0.21% (0.2083%) per month.
Kinesis users wishing to deposit coins or bars will need to have their coin and/or bar collection assayed at their expense with a service provider of Kinesis’ choosing. Additionally, fees will be charged for both the delivery and cataloguing of the coin or bar holdings.
Assay, delivery and cataloguing fees are calculated on individual circumstances and we will provide a quote after assessment.
Visit the EPD page or the EPD (Coins and Bars) page on the Kinesis Mint to apply and receive a personalised quote.
