A Canadian gold metals exchange, BitGold will pay $42 million for the Jersey-based vaulting service GoldMoney. This move will allow blockchain-using company to significantly widen their client base.

BitGold announced the acquisition in the press release:

“Upon closing of the Acquisition Agreement, BitGold will acquire the intellectual property and operating assets of GoldMoney in exchange for the issuance of 11,169,794 common shares in BitGold, valuing the transaction at CAD 51.9 million based on BitGold’s CAD 4.65 closing price on May 21st. The transaction is expected to close within 60 days.”

Three GoldMoney directors will enter the joint company’s Board of directors.

BitGold is a Toronto-based gold exchange. It uses its own “cryptocurrency”, specifically one gram of gold. All operations with grams of gold are fixed in a public ledger. BitGold also use cryptographical mechanisms that are similar to those used in the bitcoin ecosystem. Arguably, BitGold replaces bitcoin with one gram of gold to stabilize it. 

Although the transaction fees will be higher than those of  most bitcoin processing companies, using gold as a currency guarantee provides stability. The gold will be stored in vaults in Toronto, London, Zürich, Dubai, Singapore and Hong Kong. The company started its operation in spring 2015 and hopes to go public soon.

GoldMoney is a gold and precious metals vaulting business founded in 2001 by James Turk and Geoff Turk. Its headquarters are in Jersey, Channel Islands, and the company has a money transmitter license. Currently more than 135,000 users registered their accounts onGoldMoney.Com. According to the company’s press release its assets  come to about $1.5 million in value. Therefore, the acquisition allows BitGold to enlarge its client base, gain new vaults and a money transmitter license in Jersey, Channel Islands.

“We are thrilled by the potential of this BitGold and GoldMoney combination, two companies with shared values and a common vision and purpose,” said Roy Sebag, BitGold CEO. “You will not find a precious metals asset manager with more integrity than the one built by Geoff and James Turk and the GoldMoney team. With the technology of the BitGold platform we can expand the GoldMoney legacy of trust, security, and a client centric purpose to new markets, growing from a much stronger base and benefiting all stakeholders. Combining the first global e-marketplace for gold with the latest and most innovative, we instantly become the world’s largest and most active bullion money service.”