500 Startups-backed HelloGold is the first Shariah-compliant gold trading platform

HelloGold co-founders Ridwan Abdullah and Robin Lee / Photo credit: HelloGold

It was 1997, and the Asian financial crisis was in full swing. Asian currencies devalued overnight, recalled Robin Lee, co-founder of Malaysia-based financial services platform HelloGold.

While Lee – who was a regulator with the country’s securities commission at the time – had front-row seats to the crisis, it was only after he joined Boston Consulting Group in 1999 that he understood its implications. A candidate he was interviewing for a role at the company shared why she chose to study in a local university rather than abroad, as originally planned.

“Her parents had saved up for many, many years to send her to school in Australia, but just before she was due to go to university, the ringgit devalued,” Lee shared. “And suddenly, the ringgit wasn’t worth the amount of Australian dollars that they needed to send her to university.”

He adds, “That left a fundamental impression in my mind about how unjust the whole financial system was.” This experience would lead him to start HelloGold in 2015.

The idea

HelloGold is a financial services platform that allows people to buy, sell, and redeem portions of gold through a mobile app. It aims to help the underserved and unbanked save money by making it easier to trade the precious metal.

According to Lee, who previously worked at the World Gold Council, gold grows at roughly the rate of inflation. “You should not lose the value of gold.”

Whatever portion of gold you buy today will ideally be worth the same five years from now. In comparison, US$5 in a bank account may be able to buy you a cup of coffee today, but it won’t be enough a few years later because of inflation. This makes gold a good savings instrument, Lee explains.

And this is important for Malaysia, where 75 percent of the population find it difficult to save even RM1,000 (US$245).

How it works

On the HelloGold app, customers can create an account, check gold prices, and then buy and sell gold based on those rates. The platform allows people to buy as little as RM1 (US$0.24) worth of gold. Once bought, the gold is then stored in an independent vault in Singapore.

When customers complete a transaction, it’s automatically reflected in their app. They also receive an email containing the transaction details: the gold’s value (in Malaysian ringgit), weight in grams, and date and transaction ID. HelloGold keeps records of these transactions on the cloud. It has also deployed a parallel blockchain-powered system, which should keep all ownership records permanent.

Each day, HelloGold releases a customer list, which shows the amount of gold each customer has in the vault. In the event that HelloGold shuts down, the company says that customers can use this list as a legal proof of ownership.

Before users can buy gold, they need to “add cash” to their HelloGold accounts in two ways: either through online banking or a local e-wallet provider called Boost.

As a point of differentiation, the gold bought on the platform is fully allocated. This means customers completely own the gold they buy, and HelloGold only stores it on their behalf. Banks or companies that issue unallocated gold, in comparison, still hold the legal title to the asset and can lend it out at their discretion. Buying allocated gold means your asset is not tied to the performance of the company that owns it, making it less risky.

A new product on the blockchain

Making it accessible to Muslims

Assessing Shariah compliance

Gold’s benefits and risks

Future plans