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 of the British Isles. It allows the instant transfer of gold, silver and platinum between user holdings. The bank holding company used by GoldMoney is Royal Bank of Scotland.
As of 30 June 2006, over 135.0 million of value with of gold in storage, which was worth $108.0 million; and of silver, worth $28.5 million at the time.
By 31 December 2008, over US$476.0 million of value with of gold in storage, which was worth $309.6 million; and of silver, worth $142.7 million.
As of 31 January 2011, over US$1.4 billion in gold, silver, platinum, palladium and other fiat currencies was held by Goldmoney customers in over 17,200 accounts. Gold holdings total approximatley 16.39 tonnes which is between South Korea with 14.4 and Sri Lanka with 17.5. With over 23 million ounces of silver it constitutes one of the largest known physical stockpiles in the world.
Features
Asset protection
All gold, silver and platinum is stored in a vault in Shepperton, England, Zürich, Switzerland or Hong Kong. The vaults are owned and operated by VIA MAT International Ltd. The metal is insured by Lloyd's of London. The Euro-Dutch Trust Company and an annual audit report available to customers.
The quantity of gold, silver and platinum in the database, which functions as currency, is always equal to the amount of bullion stored in the vaults. All gold, silver and platinum is owned by the holding owner. Payments are instantaneous and non-reversible. This payment process is ensured through a system of internal controls and governance which include four patents with one pending. Because bullion is titled in the Holding owner's name and because payments are instantaneous and non-refundable therefore the use as a currency removes Herstatt Risk, which is endemic in the current fractional reserve banking structure, from the transaction and completely eliminates settlement, counter-party risk and credit risk.
Peter Schiff wrote, "There are also several places to buy gold on the Internet, and even several that offer storage programs. In general, I would be very reluctant to trust most storage programs, but one exception is GoldMoney.com, founded by a longtime gold advocate James Turk. Investors and shareholders of GoldMoney include two publicly traded gold mining companies"
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), platinum storage (0.59% per annum charged monthly with 100 mils or about $4.02 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%), platinum purchases (1.93%-3.51%), gold sales (currently no fee), silver sales (currently no fee), platinum sales (currently no fee), metal-to-metal exchanges (0.78%-3.99%), and currency-to-currency exchanges (0.49%).
Gold, silver, platinum and palladium investing
Gold, silver, platinum or palladium may be purchased or sold at the current spot price. Settlement of large orders may be delayed until the next London fix. The various fiat currencies include Swiss francs, Canadian dollars, Pound sterling, Japanese yen, United States dollar or Euro and may be exchanged for each other. Funds must be wired directly from a bank or credit union account to Customer Segregated Funds Account and then purchases of gold, silver, platinum and palladium may be completed.
Silver, platinum and palladium were later added for customers to purchase on 4 January 2006, 10 July 2009 and 12 January 2011, respectively. Metal-to-Metal exchanges are possible.
=== Opening a "Holding" ===
GoldMoney is regulated as a money service business by the Jersey Financial Services Commission (JFSC) and operates a Customer Acceptance Policy (CAP) 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 and the 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."
Mobile Trading
On 6 March 2009, GoldMoney released an iPhone app to allow account holders to trade in units of "digital bullion" of either gold, silver, platinum or palladium. The app was developed in partnership with mobile application developer Concentric Sky.
Considerations
Using the facility involves a few considerations that may be new to some investors. Full discussion of these matters is beyond the scope of this article but brief remarks will help to alert new users.
Reporting requirements for tax residents of the United States of America
US holding owners have reporting duties. The IRS asserts that 'each United States person who has a financial interest in or signature or other authority over any foreign financial accounts ... exceeds $10,000 at any time during the calendar year, must report that relationship'. The IRS has clarified that this requirement also applies to gold accounts. A box needs to be checked on Schedule B of Form 1040 of the U.S. Invidual Income Tax Return. Some exceptions do apply.
Taxes
GoldMoney asserts (1) they are not authorized to give tax advice, (2) with customers in 102 different countries it would be impractical to try, and (3) the user is responsible for complying with the laws of the territory from which they access the site.
See also
*Money
*Currency
*Digital gold currency
*Gold as an investment
*Silver as an investment
*Platinum as an investment

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