DIGITAL CURRENCY EXCHANGER

'Digital currency exchangers' ('DCE's, 'independent exchange providers' or 'e-currency exchangers') are market makers which exchange fiat currency for electronic money, such as digital gold currency (DGC), and/or convert one type of digital currency (DC) into another, such as WebMoney into e-gold. Exchangers apply either a commission or bid/offer spread to transactions.
Some digital gold currency accounts, such as e-gold, do not provide an in-house service to purchase their private currency so it is necessary to use a third-party ''digital currency exchanger''. According to e-gold's website the reason they do not provide an in-house exchange service is so there can be no debt or contingent liabilities associated with the business, making e-gold Ltd. absolutely free of any financial risk. They claim e-gold Ltd. does not possess currency of any nation or even have a bank account.

Contents

Risks

Exchangers

Regulatory issues

See also

External links

Risks

There are no specific financial regulations governing DCEs, so they operate under self-regulation. However the Global Digital Currency Association (GDCA), who were founded in 2002, are a non-profit association of online currency operators, exchangers, merchants and users. On their website they claim their goal is to "further the interests of the industry as a whole and help with fighting fraud and other illegal activities, arbitrate disputes and act as escrow agent when and where required." [1]
It is possible for clients to purchase DGC by credit card, and therefore receive consumer protection from their credit card company. Various exchangers offer this service, although the exchange fees are typically higher than using a wire transfer [2].

Exchangers

Comparison of DCEs (as of October 2006):
{| class="wikitable"
! 'Digital currency exchanger'
! 'Date founded'
! 'GDCA member'
! 'Telephone helpdesk'
! 'Digital currencies accepted'
! 'Fiat currencies accepted'
! 'Commission buying DC'
! 'Commission selling DC'
! 'Commission exchanging DC to DC'
|-
| ExchEngine
| 2004
| No
| Yes
| 5
| ?
| ?
| ?
| ?
|-
| GoldExchange.eu
| 2005
| Yes
| Yes
| 3
| 2
| 1.9 - 2.9%
| 1.9%
| N/A
|-
| GoldNow
| 1999
| Yes
| Yes
| 3
| 9
| 0 - 2%
| 5%
| N/A
|-
| Goldtotem
| 2005
| No
| Yes
| 4
| 3
| 3 - 5%
| 0.75 - 1.5%
| 1.5 - 3%
|-
| IceGold
| 2000
| Yes
| Yes
| 1
| 9
| 2%
| 2%
| N/A
|-
| London Gold Exchange
| 2000
| Yes
| No
| 8
| ?
| 3 - 4%
| 1 - 4%
| 3 - 4%
|-
| NetPay
| 2001
| No
| No
| ?
| ?
| ?
| ?
| ?
|-
| OmniPay
| 1996
| No
| No (answerphone)
| 4 (all issued by e-gold)
| 7
| 2%
| 2%
| 0%
|-
| ROBOXchange
| 2002
| Yes
| Yes
| 14
| 0
| N/A
| N/A
| 1 - 5%
|-
| SpeedyExchange
| 2003
| Yes
| No (answerphone)
| 7
| 3
| 8 - 13%
| 1.5 - 9%
| 0.3 - 4.4%
|-

Regulatory issues

In September 2004 several Australian based e-gold currency exchangers voluntarily ceased operation as they did not hold an Australian Financial Services licence (AFSL) [3].
Australian based DCEs that elected to close, due to the Australian Securities and Investments Commission (ASIC) licencing requirements, included:

★ goldex.net

★ sydneygoldsales.com

★ ozzigold.com
In July 2006 Gold Age was closed down by US government authorities following the arrest of the owners, Arthur Budovsky and Vladimir Kats, on account of not having a New York state "money transmitters" licence.
In April 2007 the US government seized the e-gold accounts of OmniPay, The Bullion Exchange, AnyGoldNow, IceGold, GitGold, The Denver Gold Exchange and GoldPouch Express, and forced G&SR (owner of OmniPay) to liquidate the seized assets [4].

See also

★ Bureau de Change

★ Digital gold currency

★ Gold as an investment

External links

★ Global Digital Currency Association

★ Digital Gold Articles

★ Ecurrency Directory