Breaking the barriers to gold ownership

Investing in gold has always been seen as a safe haven. In fact, investing 10% of your portfolio in gold is one of the oldest investment rules as a hedge to counterbalance riskier investments. It makes sense, gold has proven to hold its value and spending power for thousands of years. In the last five years alone the value of gold has increased by 50% in comparison to the pound sterling. It’s no wonder that in times of economic crisis and uncertainty, people turn to gold. But why aren’t more investors following the 10% golden rule?

One reason is that investing in anything physical comes with additional costs, and gold is no different. Storing gold bars at home is incredibly risky and would also involve the need to buy and install a safe. Some banks offer storage facilities, but these are on a small scale and are expensive in the long run. Most investors would choose the option to hold their gold in a specialist vault, but again costs of insurance, security and storage add up.

Investing in exchange-traded funds (ETFs) or paper gold is an option to avoid the costs of physical gold storage. It can also provide revenue stream in terms of dividends. But paper gold investments are traded like stocks and come with risks and uncertainty that physical gold hedges against. Added to this is the counter-party risk that funds could fail, or collapse. Paper gold doesn’t provide the same certainty, access and ownership as physical gold.

Another barrier is the illiquidity of gold. Holding physical gold, means tying up your money and restricting cashflow. When the price of gold increases, you don’t see the benefit in your bank account, and you can’t instantly spend that gain. Gold can only be efficiently monetised by selling it for fiat currency. Even then this isn’t a simple or instant process, and comes with broker commission and fees which eat into gains.

At Tally, we wanted give people a better form of money. We designed a self-contained monetary platform that enabled people to use a physical asset (gold) held outside of the banking system, while seamlessly working with it. Tally is the name of the platform and the unit of currency, with one Tally equal to one milligram of gold. Tally makes buying, saving and spending gold instantly easier than ever before; all through a smartphone app and Tally debit MasterCard(R).

When a customer makes a deposit, it’s exchanged for LBMA approved gold at the global gold spot price, with no additional fees or mark-up. Tally gold is fully owned by the customer and held at a specialist vault in Switzerland. The value of a customer’s holding is represented in individual Tally banking accounts (not a pooled customer account), which updates in real-time to reflect the price of gold in the local fiat currency. By linking banking accounts to a contactless Mastercard debit card, Tally makes spending physical gold seamless, converting it to fiat currency at the point of sale anywhere that accepts Mastercard at home or abroad.

In addition to making gold liquid, Tally has simplified the costs to a single monthly charge, making owning gold simpler and accessible to the man on the street as well as investors. The charge is 0.01% of the average monthly balance and covers storage, security, insurance and operational costs. This reduces to 0.05% for holdings over half a million Tally (the equivalent of approx. £19,500 as of 16 September 2019).
Although Tally breaks the barriers to gold ownership it is so much more than that. Tally brings true mainstream competition to fiat currency for the first time. It gives people a mainstream choice to save and spend in a stronger, independent form of money. Customers fully own their Tally, which is insured to the full amount giving additional peace of mind. Tally has made gold not only easy to invest in, but mainstream currency that can be used every day.

Our card is issued by Cornercard UK Limited pursuant to license by Mastercard International. Cornercard UK Limited is authorised by the Financial Conduct Authority to conduct electronic money services activities under the Electronic Money Regulation 2011 (Ref: 900186). Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.