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Ibrahim Mohammed is the founder and chief executive and OneGram, a new digital currency, at the company's offices in Emirates Financial Towers in the DIFC area of Dubai. OneGram is partnering with GoldGuard, a Dubai-based online gold trading platform to build one of worlds largest gold vaults inside the Dubai Airport Free Zone. Christopher Pike / The National

As the founder and chief executive of OneGram the Dubai-based technology company behind the first digital currency completely backed by gold - Ibrahim Mohammed is confident his cryptocurrency will be a success, even as competition in the digital currency sphere hots up.

He says with 100s of new coins releasing every day, it is OneGrams unique selling point - the fact that the currency is fully Sharia-compliant - that will set it apart.

The company has already launched an Initial Coin Offering (ICO) offering, which aims to raise more than US$500 million in capital; the tokens were launched on May 21 and will be available to buy until September 22.

OneGram has partnered with GoldGuard, a Dubai-based online gold trading platform, for the offering, with each token backed by one gram of gold, held in a vault at Dubai Airport Free Zone. Only 12.5 million tokens are available to buy in total.

The OneGram currency was created using blockchain technology, a digital method of recording data that underpins the digital currency bitcoin.

While one bitcoin today is currently worth about US$2,500 (or $2,438 at the time of writing), to buy a OneGramCoin would set you back $45 at current market prices.

Almost six weeks after the OneGram coin first went on sale, Mr Mohammed, a British Dubai resident with 10 years of experience running companies whose specialisms have included debt collection and business formation, explains how the new digital currency works and how investors can get on board:

Why did you set up OneGram?

Because of the ruling that happened in November 2016 from the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) with regards to the gold standard. It was the first time gold was deemed to be a sharia-compliant product and it got us thinking. It evolved into digitisation ofgold but then having bigger returns rather than just waiting for the market to go up - so we combined it with a digital currency.

How does OneGram work?

Its like bitcoin; its a digital currency but the major difference to any other crypto is that its backed with physical gold. Putting it very simply, if you have one bitcoin today thats worth about US$2,500 and if it crashes and went to zero youd lose all your money. With OneGram, if you buy today you pay about $45; $41 of that is in physical gold but $4 is in the coin, so if OneGram crashed you would potentially lose $4 and still have $41. Essentially its a digital token - a digital form of payment.

So how can you use this form of payment?

Globally, these kinds of tokens are mainly used in the crypto community by people that believe in [the concept] and are willing to hold it. What we are trying to develop over the next 12 months or so is a payment solution that retailers can adopt to accept payment. At this stage (until the OneGram coin is listed in September), its like holding stocks or shares. The demand is there and the prices are increasing; if you follow the crypto market at all it was worth $20 billion in 2016 and this year its worth $100bn as we speak. Most of that jump has happened in the last five months.

What is driving that?

People see the potential in it. Most governments now are talking about how to regulate the market and control it and bring it into mainstream. The growth is phenomenal. I dont think investors are risk takers because the model of crypto currencies has been proven. Japan has legalised bitcoin; its inevitable that others will follow suit.

How does OneGram work?

Register at GoldGuard.com and where you go to buy you will see the live spot price of gold and it will be a live spot buy. Underneath it you will see the coin value of $4 - thats 10 per cent of the actual transaction and thats the coin fee. You will see a total price of $45; its approximate on the site as its linked to the Allocated BullionExchange's live gold fee. You can transfer funds or buy through bitcoin but we wont accept bitcoin directly as we dont know the source of funds, so we use a company called BitPay in the United States. They do all the verifications, as they are regulated by the US government and they will accept the bitcoin and wire us US dollars.

Is the $4 a fee then?

Its a kind of administration fee because typically in crypto currencies you are paying the whole amount - so if we didnt have gold youd be paying $45 and wed have all money. But we only take 10 per cent which covers operations, staffing, support, marketing, development, blockchain etc. With typical cryptos, if they are selling at $45 they may pay 30 to 40 per cent commission on transactions and theyll sell out in a day or two. Weve adopted a real business model as opposed to a "lets loot type of crypto." So there is a 10 per cent mark up on the price to give our investors the best possible chance of higher returns and that 10 per cent will cover our costs to operate.

What happens when you list?

Then you will have your own wallet and you will hold it on your own iPad, phone or desktop. The coin will be listed on a few digital currency platforms, so any buying or selling happens through those platforms and it goes into the secondary market. In terms of where the price can be at launch and where it can be in 24 months is completely beyond our control. Some analysts have said OneGram is the closest coin that has ever come to knocking bitcoin off its pedestal.

Who are your investors?

As well as crypto tech investors, were getting people that have never invested in cryptoor digital currencies before but because of the gold aspect and the sharia regulatory aspect they are very comfortable. We get customers buying for $100 and in the same day someone will buy $200,000. There is massive interest from Africa and Pakistan, countries we never expected. We now have 4,000 to 5,000 registered users and the majority are non-Muslims;another surprise.

What happens if you dont sell all the 12.5 million coins?

Anything that is left will be burnt wiped away. If we dont sell all of them then it's likely the price will go up as there will be less in circulation. We left the first month open for anyone to buy. Now we have our affiliates, partners that will also sell the coin. The first affiliate is $100m, there are a couple more after that. We are not in any doubt that the coin will sell out.

How many have you sold so far?

Twenty-two per cent of the ICO has already been assigned thats about 2 million coins.

Once the coin is listed what happens to OneGram?

Our ongoing role is to maintain the blockchain and security of it so that the coins can trade. And we make 1 per cent of every trade, the typical fee within blockchain.

Who are you licensed by?

Cyptos are not licensed but the part that needs licensing is GoldGuard, which is a gold trading platform. That is licensed by Dubai Airport Free Zone so we are licensed to trade gold.

Can investors see the gold?

Our vaulting partner may have security issues with that but once we have our own vaulting systems we will be open to anyone that wants to inspect. For verification that the gold exists, our auditors PwC have to physically go and count the gold along with our sharia advisers so I think the investors can rest assured that the gold exists. We buy through ABX and within three days they physically store it for us.

How could it all go wrong?

Its very difficult to go wrong because the exposure is very limited its 90 per cent in gold, 10 per cent in the coin. The demand is there and the market is there so unless someone turns the internet off

Whats next?

Were in discussions about ATM machines. You could have an ATM machine in Dubai, Hong Kong or London where OneGram can be bought and sold across the globe.

ahaine@thenational.ae

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