BitGold USA
Effective today, BitGold Announces Platform Launch in the United States.
BitGold, a platform for savings and payments in gold, is
pleased to announce the launch of the BitGold platform for residents of the
US and US territories. As of today, US residents can sign up on the BitGold
platform and buy, sell, or redeem gold using BitGold’s Aurum payment and
settlement technology. US residents will also have access to the BitGold
mobile app and a prepaid card when these features launch over the coming
weeks. Send and receive gold payment features are not initially available in
the US.
About BitGold
BitGold’s mission is to make gold accessible and useful in secure savings.
The BitGold platform provides innovative solutions to the challenge of
transacting with fully allocated and securely vaulted gold. BitGold accounts
are free and convenient to open by anyone, anywhere* in just minutes. BitGold
provides users with a secure vault account to purchase gold using a variety
of electronic payment methods. All physical gold acquired through the
platform is owned by the customer, stored in vaults administered by The
Brink’s Company, acting through Brink’s Global Vault Services International,
Inc. (“Brink’s”), which insures gold through third party insurance providers.
First Ever Debit Card
Backed by Gold in Real Time
I explain below what the buyout of GoldMoney by BitGold means, but first
let's start with a look at details of the announcement of the first ever
debit card backed by gold in real time.
- First Transactional Gold Account – Gold can be used in
payments in addition to savings.
- First Gold Merchant Platform – Process Credit/Debit
Cards and earn gold!
- First "Real" Gold Card
- BitGold is an online bank account that is backed by gold
as opposed to currency
- Gold can be redeemed in as little as 10 gram increments
(approximately $370 at today's price)
- Publicly Traded, Audited by PwC, Insured, Backed by
Strong Investors
Unlike other cards that sell gold at a premium then issue a debit card, BitGold
is a gold-based settlement system in real time. It is also the first
gold-based card of any kind available in the US.
BitGold Signup
I encourage everyone to Sign Up for a BitGold Account. I have done so myself.
Promote gold!
Transactions in gold and settlement in gold, in real time are now possible.
One Plus One Equals Three
Due to my long-standing relationship with GoldMoney, many readers have asked
what the purchase of GoldMoney by BitGold means.
After careful review over the past couple weeks with both James Turk, founder
of GoldMoney, and Roy Sebag, the co-founder of BitGold, I am pleased to
report the news is 100% positive.
Storage fees will drop, and the idea of a debit card backed by gold is a fantastic
idea for numerous reasons.
Email From James Turk
Here is an email I received from James Turk regarding the GoldMoney/BitGold
relationship.
Hi Mish
Once the transaction is complete, GoldMoney will become a subsidiary of
BitGold, a publicly traded company on the Toronto Stock Venture Exchange,
which adds yet an additional level of oversight to GoldMoney’s
industry-leading governance. BitGold just completed a financing for C$18
million, which included some top name institutional investors.
After this financing, BitGold’s two main owners are the shareholders of
GoldMoney and Roy Sebag, whose understanding of gold is as deep as anyone I
have ever met. He becomes CEO of the group, and I have no hesitation seeing
the baton passed to him.
With its IT expertise, C$35 million of cash in the bank and other resources,
the combined BitGold/GoldMoney has resources far beyond what GoldMoney alone
was able to put together. So I really see the combined company as a true
1+1=3 situation - the whole is greater than the sum of its parts.
GoldMoney will continue to operate in Jersey as a wholly-owned subsidiary of
the Toronto parent. It will have the same governance procedures and controls
that enabled GoldMoney to build its business. So nothing really changes in
that regard.
Additionally, me and two of my fellow GoldMoney directors will join the board
of the parent company in Canada.
All of us in GoldMoney and Roy and his team in BitGold have the same
objective - to enable digital gold currency to circulate in global online
commerce as an alternative choice to national currencies. My expectation is
that our combined company will take GoldMoney up to the next level.
Regards
James
Follow-Up Discussion
In a second email, James Turk introduced me to Roy Sebag and Josh Crumb, the
co-founders of BitGold.
Since then, Roy and I have spoken on many occasions. Following those
discussions, I echo the views expressed by James Turk.
Seldom does one plus one equal three, but that idea makes sense here. I back
promotion of gold as a currency, and BitGold has the resources and
institutional backing to do it properly. Attempts by others have failed or
languished.
Bullion Vault Rebuttal
Some readers have asked about the Bullion Vault article Bitcoin, BitGold, GoldMoney - and BullionVault.
In the article, BullionVault makes a number of allegations that took me a
while to sort out. For a rebuttal, please see Roy Sebag's Instablog, Roy Sebag And Josh Crumb View On
BullionVault.
Rebuttal Highlights
- BullionVault's net assets are comprised of intercompany
loans (yes, there is money reported as loans moving back and forth
between the company and the CEO at above market interest rates). This
practice raises a fiduciary red-flag both for shareholders of the
business, but also for customers because it introduces counterparty risk
and undue reliance on one individual to the overall business. The
balance sheet also includes a lot of outstanding short-duration lending
facilities, adding more risk. In contrast, GoldMoney and BitGold are
debt-free.
- BullionVault is an unregulated private company that
operates in the UK, outside of the protections offered by the Financial
Conduct Authority to customers of financial service companies. I am
personally at a loss for words as to why the FCA or the Money Service
Business regulators in the UK have not approached BullionVault requiring
it to register as an E-Wallet or Money Service Business given the size
and amount of customer holdings. When Josh and I founded BitGold, we
spent nearly a year in an open dialogue with Canadian regulators,
establishing a legal framework that would allow us to offer our service
before proceeding with a plan of operation.
- BullionVault does not use an internationally recognized
auditor and in contrast to GoldMoney, does not complete audits in accordance
with ISAE standards. Its company accounts are prepared by a little known
firm in Southwest England (Albert Goodman) publicly available as
required under UK law, and not a voluntary disclosure purporting to
offer governance. Put differently, BullionVault's financial statements
add little to the governance of customer assets, and certainly cannot be
compared to the quality and integrity of the audits made available by
GoldMoney/BitGold.
- At BitGold, Josh and I take an annual salary of $1 and
have personally invested over $3 million throughout the years in
building the business. We don't need an annual salary, let alone
"double dip" by also lending money back to the company [as
does BullionVault].
- BullionVault has paid no significant dividends, while
the company's CEO extracts via the company's loan arrangements favorable
terms to the disadvantage of minority shareholders. Compare that to
GoldMoney, which has paid out cash dividends democratically to all
shareholders for several years highlighting owners income and
free-cash-flow generation.
- The culture we are building at BitGold/GoldMoney is one
that understands gold; we are passionate about the potential gold holds
for people's savings.
- Our service at BitGold is significantly less expensive
than BullionVault. They charge a minimum storage fee of $4 per month for
gold and $8 for silver. That means if you own $1000 worth of each metal
you are paying 4% and 9.6% per annum respectively just for storage! That
same $1,000 worth of metal would carry no storage fees at BitGold and
between 0.12%-0.39% fees through GoldMoney.
- The saddest part about the negative energy that
BullionVault and others have instigated is that we should all be working
together, not against each other. Gold still represents a tiny fraction of
global financial assets. Together, BullionVault and BitGold/GoldMoney
account for less than .00001% of the world's financial assets. The
market is massive and BullionVault should be focused on expanding the
category as we are doing each day. BullionVault's CEO should focus on
building his business and serving his customers, not attacking a new
generation of entrepreneurs trying to broaden access to gold.
Additional Points
I am aware of two additional points not directly mentioned in Sebag's
rebuttal:
- Last week, the combined companies raised an additional
$21 million in cash bringing their combined cash position to nearly $40
million. This is impressive given the overall state of the gold market
and indicates the principals support from institutional investors.
- BullionVault is unregulated and does not have an ISAE
Audit by a Big Four Acounting Firm. GoldMoney is regulated by the JFSC
and maintains an ISAE Audit by Delloitte.
After reading the rebuttal and talking with Roy Sebag on numerous occasions,
I firmly believe it is not GoldMoney/BitGold that has issues, but rather
GoldMoney/BitGold competitors.
Free Conversion!
GoldMoney now offers free conversion from any other platform such as Perth,
BullionVault, even GLD. GoldMoney will pay any associated friction costs
(sell-buy costs, etc.) to complete the transaction.
To discuss this offer with GoldMoney, please email Transfers @ GoldMoney.Com
(removing the spaces before and after the @ symbol).
On most browsers this link will automatically open up your email client
application: Email
Goldmoney Regarding Transfers to GoldMoney
Gold is Money
I still view gold as money. Widespread acceptance of a BitGold card will go a
long ways towards alleviating any doubts and disagreements some have over
this issue.
My intent is not to use BitGold for major purposes as I believe gold is to be
accumulated over time, and a core position held at all times. Yet, I do
intend to use the card occasionally as I want to encourage merchants to
accept the idea that gold is money. Once merchants become convinced that the
price of gold has bottomed, many will choose to hold a percentage of their
profits in gold.
Moreover, merchants will like the idea because BitGold does not have
processing fees. It does have fees for exchange to other currencies, but
those fees are lower than normal processing fees.
This is a win-win situation for all involved.
Disclosure
In the sake of full disclosure, I have a relationship with GoldMoney that
continues, and a new one with BitGold.
Yet, and as I have stated on many occasions, my reputation is very important
to me. I do not enter relationships easily. If I genuinely thought there were
major issues with GoldMoney or BitGold, my relationship with them would be
over.
Instead, I have taken the time to research this matter thoroughly, and have
concluded the GoldMoney/BitGold deal is a good one for the industry, for
merchants, and individuals alike.
Want to promote gold as money? Then please Sign Up
for your BitGold Account today!
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
