The Sunday Telegraph
By Edward Simpkins
3 December 2000
The oldest medium of exchange moves online this month with the launch of GoldMoney.com, an internet currency provider that will allow users to pay for products anywhere.
GoldMoney, based in the Isle of Man, says it has developed an e-commerce payment system that enables global buyers and sellers to make and accept instantaneous payments in weights of gold called GoldGrams. A GoldGram represents a gram of gold held in vaults with the system working on the principle that users transfer gold from buyer to seller without it leaving the vault.
The current price of a GoldGram can be checked on the web site in various currencies. The gold price has been falling, but the company points out that while a GoldGram would have fallen in value against the yen, it would have risen in value against the Euro over the past year.
The system, aimed at corporations and cross-border traders, is designed to eliminate payment risk as there is no possibility of default on payment and it uses high strength encryption software, downloaded by account holders. Payments are processed in real time with funds transferred instantly. It also offers low transaction fees of about $1 per transaction, much less than bank fees for wiring currency.
GoldMoney is backed by Hyde Park Holdings, a New York investment group, which put in $600,000 earlier this year and is set to invest a similar amount.
James Turk, founder of GoldMoney, said: 'We are taking the world's oldest money, gold, and using a 21st century technology to enable its circulation as a currency in global commerce.' He aims to make it the common currency of global commerce.
The World Gold Council, based in London, will this week publish a report on using gold for payments over the internet. It points out that digital money will eventually become widely used and could be issued by private institutions rather than governments and central banks.
Richard Rahn, author of the report, says: 'Like the US dollar, gold is recognised worldwide as a store of value. This makes digital gold a candidate as an international medium of exchange. The pre-existing demand for gold assets gives gold an important head start over all competitors except major national currencies.'