GoldMoney

GoldMoney is a digital gold currency founded in 2001 by James Turk. The main office and servers are located in Jersey, one of the Channel Islands. GoldMoney allows the instant transfer of gold between user holdings.

As of June 30 2006, GoldMoney was storing over $135.0 million of value with convert|176600|ozt|kg|lk=on of gold in storage, which was worth $108.0 million; and convert|2666445|ozt|kg of silver, worth $28.5 million at the time. [ [http://goldmoney.com/en/report.html Gold Money - Report] ]

As of June 30 2008, GoldMoney was storing over $387.0 million of value with convert|252594|ozt|kg of gold in storage, which was worth $235.0 million; and convert|7469914|ozt|kg of silver, worth $131.8 million. [ [http://goldmoney.com/en/report-monthly.html Gold Money - monthly report] ]

Features

Asset protection

All gold and silver is stored in a vault in Shepperton, England or Zurich, Switzerland. The vaults are owned and operated by VIA MAT International Ltd. [http://goldmoney.com/en/partners.html Gold Money - Partners] ] The metal is insured by Lloyd's of London [ [http://goldmoney.com/documents/storage-insurance.pdf Gold Money - Insurance] ] . The Euro-Dutch Trust Companyverifies and approves all increases and decreases of precious metals in GoldMoney's database. Deloitte and Touche LLP, GoldMoney's external auditors, complete periodic system reviews using stringent standards, such as SAS 70 Type II, [ [http://goldmoney.com/en/guarantee.html Gold Money - Guarantee] ] and an annual audit report available to GoldMoney customers.

The quantity of gold and silver in the GoldMoney database, which functions as currency, is always equal to the amount of gold stored in the vaults. All gold and silver is owned by the owner of the GoldMoney holding. Payments are instantaneous and non-refundable. This payment process is ensured through a system of internal controls and governance for which GoldMoney has four patents with one pending. [ [http://goldmoney.com/en/patents.html Gold Money - Patents] ] . Because bullion is titled in the Holding owner's name and because payments are instantaneous and non-refundable therefore the use of GoldMoney as a currency removes Herstatt Risk, which is endemic in the current banking structure, from the transaction and in effect eliminates settlement and counter-party risk.

Fees

GoldMoney derives revenue from two main types of fees: Holding and Exchange. Holding fees are for gold storage (0.15-0.18% per annum charged monthly with 100 mils or about $2.98 minimum), silver storage (0.87-0.99% per annum charged monthly with 0.2oz minimum), payments (10-100 mils), and the service and management of customer segregated funds (0.25% per annum paid monthly and deducted from interest earned). Exchange fees are for of gold purchases (0.98%-3.74%), silver purchases (1.99%-5.24%), gold sales (currently no fee), silver sales (currently no fee), metal-to-metal exchanges (0.78%-3.99%), and currency-to-currency exchanges (0.49%).

Gold or silver investing

Gold or silver may be purchased or sold at the current spot price. Settlement of large orders may be delayed until the next London fix. The various currencies include US$, C$, GBP or Euro and may be exchanged for each other. Funds must be wired directly from a bank or credit union account to GoldMoney's Customer Segregated Funds Account and then purchases of gold or silver can be completed.

On January 4, 2006, Turk announced that the purchase of silver is now available through the GoldMoney system. Metal-to-Metal exchanges are possible.

Holding opening

GoldMoney is regulated as a money service business by the Jersey Financial Services Commission (JFSC). [ [http://goldmoney.com/en/images/about-images/jfsc-license.pdf Gold Money - JFSC License] ] [cite news | first= | last= | coauthors= | title=JFSC Search Registry | date= | publisher=JFSC | url =https://www.jerseyfsc.org/registry/documentsearch/NameDetail.aspx?id=127166 | work = | pages = | accessdate = 2008-09-24 | language = ] GoldMoney operates a "Customer Acceptance Policy" (CAP) [ [http://goldmoney.com/en/cap.html Gold Money - Customer Acceptance Policy] ] in accordance with JFSC requirements. All customers must provide proof of identity, address and declare their source of funds for "know your customer" (KYC) and anti-money laundering) (AML) requirements. Thus opening a Holding is similar to opening a bank account. GoldMoney's policy also requires that all customer identification documents are certified. "GoldMoney is built upon a solid foundation of rules and ethics. Therefore, GoldMoney has a zero-tolerance policy for fraudulent activity." [cite news | first= | last= | coauthors= | title=Why doesn't GoldMoney tolerate Ponzi or pyramid schemes? | date= | publisher=Net Transactions Limited | url =http://support.goldmoney.com/article.php?id=028 | work = | pages = | accessdate = 2008-09-24 | language = ]

Criticisms

Jersey is a respected and major financial and tax haven [ [http://www.guardian.co.uk/business/2007/nov/04/4] ] with strict bank secrecy laws. For example, under 13.075 Part 4 Section 42(3) of the Banking Business Law 1991 "Any person who discloses information in contravention of this Article shall be guilty of an offence and liable to imprisonment for a term not exceeding 2 years or a fine, or both." [ [http://www.jerseylaw.je/Law/lawsinforce/consolidated/13/13.075_BankingBusinessLaw1991_RevisedEdition_1February2008.pdf] ] The G7 has claimed unfair tax competition practices. [ [http://www.gfsc.gg/news/archive/econo_crime.html] ] Therefore Holding owners may have reporting duties [ [http://www.irs.gov/pub/irs-pdf/f90221.pdf] ] and find inconveniences using their bullion as collateral with domestic banks.

See also

*Digital gold currency
*Gold as an investment

References

External links

* [http://goldmoney.com GoldMoney Official website]
* [http://www.jerseyfsc.org/registry/ Jersey Financial Services Commission]
* [http://goldmoney.com/en/images/about-images/jfsc-license.pdf Jersey Financial Services Commission's Certificate of Registration]
* [http://kitco.com/charts/popup/au24hr3day.html Daily Gold Chart]
* [http://www.kitcosilver.com/charts/24hoursspot.html Daily Silver Chart]