What I considered so unique to c-gold is their over-the-counter bailment’s and redemptions. This operation is handled at brick and mortar locations. Verified, account holders simply drop off a bar and pick up a bar when funding or redeeming their digital account. There is NO surcharge or extra fees for this operation. Bars are also shipped worldwide and the service is fast Nice!
Given that the minimum bailment is 1Kg, you won’t be popping in and out much but I assume that once people are confident that their C-gold can be redeemed on demand for real gold, then they won’t bother with the real stuff. I also noted the comments about transparency, which I think is essential to getting something like this into the mainstrea. For C-gold you can see their daily holdings right down to the bar mark and number from the web site.
This is not to imply, incidentally, that digital gold is just for the Islamic community or that gold is the only commodity that may be used as a store of value. It may well be that digitised commodity money is in the future for all of us. Ben Steil, director of international economics at the influential Council on Foreign Relations (who wrote that Financial Times piece) certainly puts forard some challenging views. He says, for example, that
As radical and implausible as it may sound, digitising the earth’s 2,500-year experiment with commodity money may ultimately prove far more sustainable than our recent 35-year experiment with monetary sovereignty.
Mr. Steil was also quoted in Foreign Affairs (May 2007) saying
Governments must let go of the fatal notion that nationhood requires them to make and control the money used in their territory. National currencies and global markets simply do not mix… in order to globalise safely, countries should abandon monetary nationalism and abolish unwanted currencies, the source of much of today’s instability.
Now that’s what I call thinking out of the box. Here’s a paper that Neil McEvoy and I wrote for the Financial Cryptography conference in 1997 that touches on similar ground…
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]