GoldMoney Totally Explained

Everything about Goldmoney totally explained

GoldMoney is a digital gold currency founded in 2001 by James Turk. GoldMoney's main office and servers are located in Jersey, one of the Channel Islands. GoldMoney is primarily used by clients to buy gold as an investment and, secondly, as electronic money amongst users. Unlike BullionVault, for example, GoldMoney allows the instant transfer of gold between user accounts. Clients can always sell their gold back to GoldMoney at the current gold price. As of June 30 2006, GoldMoney had 176,600 ounces (5,492,899 grams) of gold in storage, which was worth $108.0 million. They also had 2,666,445 ounces (86,935,772 grams) of silver, worth $28.5 million at the time (External Link

Features

Asset protection

GoldMoney provides quarterly reports that verify the quantity of goldgrams is always equal to the amount of gold stored in the vault. Plus, external auditors complete periodic system reviews, with their annual report available to GoldMoney customers. All gold and silver is stored in a vault in Shepperton, England or Zurich, Switzerland owned and operated by VIA MAT International Ltd., and is insured by Lloyd's of London.

Fees

Unlike e-gold, who charge a gold storage fee of 1% per year (debited in monthly installments), GoldMoney only charges a fixed gold account fee of 0.1 gram per month (or 1.2 grams per year). This means that e-gold's costs are lower for gold holdings of under 120 grams (worth approximately $2,500), but GoldMoney is cheaper on larger holdings. For example a gold holding worth $1,000 would incur annual costs of $10 with e-gold but $25 with GoldMoney, while $30,000 would incur costs of $300 with e-gold but still only $25 with GoldMoney.

Gold investing

GoldMoney users can buy gold at much cheaper prices than if they were to take physical delivery. The system also allows users to invest in much smaller amounts (as low as $1) than typical gold investors are economically able to. Investments can be made by transferring funds directly from a bank or credit union account.

Silver investing

On January 4, 2006, Turk announced that the purchase of silver is now available through the GoldMoney system. However, it's only available for storage and not as a payment system, like gold. Gold already in customer accounts can be used to buy silver, and vice versa. Unlike gold, the storage costs of holding silver are similar to e-gold at 0.986% per year, charged monthly.

Account opening

GoldMoney operates a Customer Acceptance Policy (CAP). They demand that all customers must provide proof of identity and address plus declare their source of funds ("know your customer" and anti-money laundering), making it similar to opening a bank account. If customers intend to hold over 1,000 gold grams (worth about $20,000 US) or make numerous in/out-exchanges, GoldMoney's policy also requires that all customer identification documents are certified. This inconvenience makes the system less attractive for criminal activity and for privacy advocates.

Criticisms

Unlike other digital currencies, since 19 May 2006 GoldMoney accounts can no longer be funded through a digital currency exchanger. On their News web page following customer login they say:

In order to comply with new bank requirements, effective today all customer transfers to and from GoldMoney must be made using bank accounts held in the customer's name...When buying goldgrams or silver, funds must be transferred from a bank account held in the name of the customer (whether an individual or corporate entity)...When selling goldgrams or silver, the proceeds must be wired to a bank account held in the name of the customer (whether an individual or corporate entity).

However this inconvenience does mean GoldMoney complies with current international bank regulations.