Curious whether Bitcoin or gold is the better bet? We break down the pros, cons, and what really sets them apart so you can decide what suits you best.
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Bitcoin versus gold: it's like asking whether you prefer chocolate or vanilla ice cream, except the stakes feel a bit higher when we're talking about assets that people use to preserve wealth.
This comparison has become one of the most fascinating conversations in modern finance. You'll find everyone from your tech-savvy nephew to seasoned Wall Street veterans weighing in on this debate. The reason it captures so much attention? Both assets serve similar purposes for many people in that they're often viewed as alternatives to traditional currencies and ways to maintain value over time.
Media outlets regularly feature this matchup, and it's not hard to see why. We're essentially watching a clash between the old guard and the new kid on the block, between something you can hold in your hands and something that exists purely in the digital realm.
Similarities between Bitcoin and gold
Before we dive into their differences, let's talk about what these two have in common, and honestly, it's more than you might think.
Both Bitcoin and gold operate like that friend who marches to the beat of their own drum. They don't need permission from central banks or governments to exist. Gold has been doing its own thing for thousands of years, while Bitcoin has been independently chugging along since 2009, free from the control of any single authority.
Here's where it gets interesting: both are naturally scarce. There's only so much gold buried in the earth, and Bitcoin has a built-in limit of 21 million coins. It's like having a limited-edition collectible - the scarcity is part of what makes people pay attention.
This is where the "digital gold" nickname comes from. People started calling Bitcoin this because, like gold, it's rare, it's not controlled by governments, and many view it as a way to store value. It could be gold's tech-savvy cousin who traded in the physical form for a digital existence.
Both assets have also been described as stores of value, meaning people turn to them when they want to preserve their purchasing power over time. The idea is that what you put in today will still hold meaningful value tomorrow.
Differences in utility and form
Gold has been humanity's companion for millennia. You can touch it, wear it, and even use it in your smartphone (yes, there's actually gold in there!). Industries rely on gold for everything from electronics to medical equipment. Central banks stack it in their vaults like a financial security blanket, and jewellers craft it into pieces that mark life's special moments.
Bitcoin, on the other hand, exists purely in the digital world. You can't hold it, but you can send it across the globe faster than you can say "blockchain." It's supported by a network of computers that work together to verify transactions, creating a system that operates 24/7 without taking coffee breaks.
Think of gold as the sturdy oak tree: deeply rooted, physically present, and serving multiple purposes. Bitcoin is more like the wind: you can't see it, but you can feel its effects, and it moves with incredible speed and efficiency.
Historical trends and market behaviour
Let’s take a look at how these assets have behaved over time.
Gold has earned a reputation as the steady friend who shows up when times get tough. During economic uncertainty, gold often sees increased interest as people seek stability.
Bitcoin, meanwhile, is known for its dramatic personality. It can swing from exhilarating highs to stomach-dropping lows, sometimes within the same week. This volatility means Bitcoin can experience significant price movements: some days it feels like it's reaching for the stars, other days it seems to be taking a scenic route through the valleys.
These different personalities mean they each attract different types of attention and serve different roles in people's financial lives.
Reactions to global events
Nothing reveals character quite like a crisis, and both Bitcoin and gold have had their share of testing moments.
During the 2008 financial crisis, gold saw increased demand as people sought alternatives to traditional investments. When the COVID-19 pandemic hit in 2020, gold initially attracted attention as uncertainty gripped global markets.
Bitcoin has had its own unique responses to global events. During certain periods of economic uncertainty, some have turned to Bitcoin as an alternative. However, during market stress, Bitcoin has sometimes moved in unexpected directions, reminding everyone that this digital asset often writes its own rules.
Inflationary periods have also provided interesting case studies. Gold has historically been viewed as a hedge against inflation, while Bitcoin's response has been more varied and unpredictable. The Bitcoin vs gold debate is essentially watching two different strategies play out in real-time.
Adoption and access
The way people access these assets tells its own story about our changing world.
Bitcoin has recently been making headlines with the introduction of exchange-traded funds (ETFs), making it easier for traditional investors to gain exposure without having to figure out digital wallets and private keys.
The digital nature of Bitcoin means you can access it from anywhere with an internet connection. No need to worry about storage space or security guards - just remember your password (and any other safeguards you have in place).
Gold, meanwhile, has the advantage of thousands of years of infrastructure. Banks have vaults, dealers have established networks, and there's a whole industry built around buying, selling, and storing the precious metal.
Risks and transparency
Every asset comes with its own set of considerations, and both Bitcoin and gold have their unique profiles.
Bitcoin operates in a world where regulations are still being written. There are also cybersecurity considerations, as digital assets exist in a realm where hackers and technical glitches can pose risks.
Gold has more traditional concerns. Storage and insurance can be costly, and there's always the physical risk of theft or damage. You need to think about where to keep it safe and how to protect it.
Both assets have their own transparency characteristics. Bitcoin transactions are recorded on a public ledger that anyone can view, while gold transactions often happen through traditional channels with varying levels of public visibility.
Perspectives from experts
The financial world is full of smart people with different opinions, and this topic certainly brings out diverse viewpoints.
Institutions like BlackRock have entered the Bitcoin space with ETF offerings, suggesting growing institutional interest. While the CME Group, which offers futures contracts for both assets, has observed how institutional trading has evolved for each.
These expert perspectives form part of a broader ongoing conversation about how these assets might fit into the modern financial landscape.
What's fascinating is how these viewpoints continue to evolve as both assets mature and as global economic conditions change.
Framing the question: what role might each play?
Rather than asking which is "better," perhaps the more interesting question is: what role might each play in different contexts?
Consider what qualities matter most to you in a store of value. Are you drawn to the tangible nature of physical assets, or does the digital convenience appeal to you? How do you feel about volatility: is it something you can live with, or do you prefer steadier movements?
The answer often depends on individual circumstances, goals, and comfort levels. Some people find comfort in gold's long history, while others are excited by Bitcoin's technological innovation. Some appreciate gold's physical nature, while others value Bitcoin's portability and accessibility.
These aren't questions with universal answers, they're personal considerations that vary from person to person.
Final thoughts
The Bitcoin versus gold discussion continues to evolve as both assets mature and as our understanding of their roles in modern finance deepens. Rather than viewing this as a winner-take-all scenario, perhaps the most interesting approach is to understand how each asset's unique characteristics might serve different purposes in our increasingly complex financial world.
What matters most is understanding your own needs, risk tolerance, and goals before making any financial decisions. After all, the best asset is the one that aligns with your personal circumstances and financial objectives.
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Day, Month,2021, LONDON: TAP Global has been shortlistedin the ‘Best Use of Crypto in Financial Services’ in the Emerging Payments Awards(EPA) 2021.
Now in its 14th year, the Emerging Payments Awardscelebrate innovation and collaboration by recognising companies thathave made significant impact in supporting and providing payment solutions forconsumers and businesses.
It is one of the most recognized awards within the UK payments industry with an independentpanel of 58 judges including this year:
· Anna Maj FinTech Leader, Senior Advisor, Truffle Capital, SeniorLecturer CFTE
· Jill Docherty [ of Business Development, UK & Ireland, Visa
· Martha Mghendi-Fishe Founder & Executive Board Chair, EWPN
· Mark Walker Co-founder & COO Editorial Director, The FintechPower 50 and The Fintech Times
· Joanne Dewar CEO, Global Processing Services
· Nikki Evans CEO EMEA, EML
Tap Global wasshortlisted for The ‘Best Use of Cyrpto inFinancial Services’ category based on criterias such as the benefits it providesto its end-users, how TAP stands out from its competitors due to its featuresand innovation, and the proven evidence of its success in the market.
“‘Tap was one of the first companies to launch a crypto prepaidpayment card with Mastercard in the EU’ in 2020 and our cryptocurrency-to-fiat prepaidMastercard and smartphone app give users the
power to instantly trade all major cryptocurrencies to fiat, andto make purchases with their cryptocurrency”, comments David Carr, CEO atTAP GLOBAL.
“Tap’s proprietary AI Middlewareconnects to multiple exchanges simultaneously, automatically validatingavailable liquidity and selecting the most competitive prices whilefacilitating trades in a matter of seconds. Users can convert their cryptocurrency assets to fiat instantly,allowing them to pay for goods or use an ATM anywhere Mastercard is accepted.
Through the smartphone app, users can securely send and receivecryptocurrencies and fiat, view their transaction history, lock and unlocktheir card in case of loss and instantly view their PIN. Tap offers its usersfull EEA coverage for card, banking and cryptocurrencies and a named EUR IBANand/or GBP Sort Code and Account Number, as well as secure, offline, coldstorage behind a multi-signature wallet with the highest grade security for allcryptocurrency assets”, he further adds.
“It’s an honour to be shortlisted for this award which furtherrecognizes the added value TAP brings to market and the benefits for our end-users.None of this would have been achievable without the hard work of our teams andthe support of our partners”, says David.
Commenting on theannouncement, Kriya Patel, CEO at Transact Payments adds, “The EPAawards are some of the most prestigious awards in our industry recognisingcompanies that are making a real difference in driving innovation in payments.We’re delighted to be working with TAP Global and being shortlisted for thisaward.”
Saving and investing are two key elements to managing one's personal wealth. In this article, we explore the benefits and downfalls of both these tools and give you a broader understanding of the topics.
What Does saving entail?
Saving money is an imperative step in building one's wealth and involves putting money away on a consistent basis, consistency is key. These funds are usually kept in an interest-bearing account, allowing the value to increase passively over the years.
In the United Kingdom, there are different types of ISA (individual savings accounts) that offer tax-free savings options.
In order to save, one must be spending less than they're earning.
What does investing entail?
Investing involves buying an asset with the intention for it to accumulate in value. This typically comes after saving, although the earlier the better. People invest in the likes of stocks, cryptocurrencies, property and even themselves (education, capital for a business) in the hopes of generating returns.
What's the difference between saving and investing?
The biggest difference between the two is the varying returns you can earn. Saving money in a bank account typically provides returns of 0.5 - 0.8%, while the return potential on cryptocurrencies and stock is much greater.
The other main difference between saving and investing is the risk. So, while earning higher returns on investments might sound much more appealing, the risk is usually greater. Savings accounts carry minimal risk and are usually insured while investment portfolios will rise and fall with the market and are only insured if the investment company fails. Investors should balance the options and establish which risk level they are comfortable with.
In light of these risks, savings are recommended for short term goals while investments cater better to long term financial objectives. This is because long term investments will ride out the ebb and flow of markets and recover even if there is a drop over a certain period. Savings on the other hand are more easily accessible and won't be "interrupted" if the funds are used for an emergency.
However, savings are also susceptible to inflation as the interest rates are seldom higher than the inflation rates. For example, if your bank is offering a 0.6% interest on your savings account and inflation rose 2%, your savings would have actually decreased in value. Investing typically beats inflation.
The similarities between savings and investing
As both tools are excellent at building and creating more wealth, there are bound to be similarities between the two.
The main similarity between the two is that both options are best started now, whether you're in them for the long or short term benefits. This is due to compounding. Compounding is the process where the interest you earn on an investment or savings account is continuously reinvested, increasing the base sum each period.
For example, if you put $1,000 into a compounding savings account and earned 2% interest each year. The next year you will be earning 2% interest on the lump sum plus the interest earned, $1,020. The next year you would earn $1,020.40 ($1,020 interest earned, $20.40). This doesn't sound like too much, but over a ten-year period, you would have amassed $219.20 without having done a thing.
Before you get started
Before getting started on either of these options, ensure that you have a positive cash flow and are debt-free. You'll also need to establish what your risk tolerance is, your short term and long term financial requirements, and when you would like to access the money.
If you don't have one already, you'll want to establish an Emergency Fund that can cover your living expenses for 3 - 6 months. Should you lose your job you can then fall back on this loan and not have to rely on credit cards with high-interest rates.
Experts also recommend setting up a retirement fund, with automated monthly contributions. Once your emergency and retirement funds are established, you can consider a short term savings account or long term investment, or both.
Pros and cons of saving and investing
Below we highlight the pros and cons of both tools:
Saving
Pro: Money is accessible and can easily be withdrawn.
Pro: Exempt from market volatility.
Con: Cannot leverage on market gains (potentially missing out on large compound interest benefits).
Con: Susceptible to inflation.
Investing
Pro: Longer time frames allow for favourable compounding interest.
Pro: Could tap into large market gains.
Con: Exposed to more risk as markets are susceptible to drops.
Con: May incur a penalty if the money is withdrawn too soon.
The bottom line
Both savings and investment options carry their own set of risks and rewards and it's ultimately best for you to speak to a financial adviser who is able to provide you with calculated professional advice.
Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions or other material as financial advice. The information herein does not constitute an offer to sell or the solicitation to purchase/invest in any assets and is not to be taken as a recommendation that any particular investment or trading approach is appropriate for any specific person. There is a possibility of risk in investing as investors are exposed to fluctuations in all markets. This communication should be read in conjunction with Tap's Terms and Conditions.
Whether dissecting crypto or fiat currencies, the foundations remain the same: the currency must serve as a store of value and function as a medium of exchange for goods and services. While both these currency options tick those boxes, cryptocurrencies tend to also be followed by a dark cloud of volatility in the financial sector.
Market volatility is a natural byproduct of a developing market, however, it can also cause many losses if not managed correctly. When the crypto markets go through high levels of market volatility they tend to get discredited with being a viable payment option. After paying withness to the Bitcoin market swings, several individuals recognised this flaw in the digital currency space and created a solution, "the stablecoin".
In this article we establish what is a stablecoin is, how it fits into the financial landscape and explore the pros and cons of these digital currencies.
What Is A Stablecoin?
Stablecoins are digital currencies that harness the benefits of being a decentralized, blockchain-operated currency without volatility. Backed by any currency or commodity, stablecoins are pegged to the value of their underlying asset and managed and secured by their relevant platforms. For instance, Tether is pegged to the US dollar while Tether Gold is pegged to the price of gold and Tether EURt is backed by the Euro.
These currencies operate like any other cryptocurrency, using blockchain technology to maintain and operate the network, but do not fluctuate in value based on supply and demand. Rather the price remains consistent with the asset it is pegged to, providing a better tool for digital payment transactions.
How Do Stablecoins Maintain Their Price?
While we've established that stablecoins are pegged to a commodity and reflect that price, let's cover how exactly that is achieved. Using fiat-backed stablecoins as examples, the companies behind these coins are required to hold a US dollar equivalent for each coin in circulation (or Euro if the stablecoin is pegged to it).
These funds, also referred to as reserves, are either held in bank accounts or can be a combination of cash and short-term U.S. Treasury bonds. Most of the companies issuing stablecoins conduct third-party audits to prove that their reserves are at the correct levels and release this information to assure users that their coins are always worth $1 (or the currency-backed equivalent).
Why Have Stablecoins Become so Popular?
The first stablecoin to enter the market was Tether in 2014, pegged to the US dollar. Tether is currently the third-largest cryptocurrency based on market capitalization, illustrating its vast popularity. The second biggest stablecoin currently on the market is USD Coin, also backed by the US dollar, which sits in the top 5 biggest cryptocurrencies with an equally impressive trade volume. Both these coins have provided valuable talking points within the industry as their market caps and adoption increase and they climb the ranks of the biggest cryptocurrencies.
Due to their resistance towards volatility, stablecoins have increased in popularity and are more widely used for conducting business around the world and executing cross border payments.
The Pros Of Stablecoins
Stablecoins are popular options for both businesses and individuals conducting business across borders. Below we outline the top benefits that stablecoins present to the market:
Digital Currency
The obvious first benefit of stablecoins is that they are maintained by blockchain technology and able to conduct international transactions in a much shorter time frame and for less cost than fiat currencies. The fast settlement times make these currencies an excellent, cross-border medium of exchange. They are also easy to use as they operate from wallets in similar ways to traditional cryptocurrencies.
Zero Volatility
Due to the nature of stablecoins being pegged to a fiat currency or commodity, they typically experience little to no high volatility trading periods resulting in a more reliable currency with the benefits of blockchain technology. Pertinent to increasing its adoption.
Hedge Against Failing Markets
Stablecoins have become increasingly popular for traders to hedge against other cryptocurrencies when markets experience a decline in price. Stablecoins allow traders to quickly liquidate their digital assets and easily reenter the market when the price stabilizes.
The Cons Of Stablecoins
Centralisation
While blockchain technology and cryptocurrencies celebrate the notion of being decentralised, stablecoins do bring in a nature of centralisation, particularly when it comes to the backing of the assets. Ensuring that each coin in circulation is backed by an equal reserve value requires a team that leans the operation more toward a centralized structure.
Transparency
Several stablecoins have been called out publicly for not being transparent with their reserves. Tether, for example, has seen much public outcry concerning whether the company has the correct amount of reserves, leading to fines and regulations imposed by the US government. They have since released a report on the current reserve holdings of the company.
In Conclusion
Many traders have incorporated stablecoins into their portfolios, to have as a hedge against falling crypto markets or falling fiat markets. These digital assets are also used by businesses around the world to conduct payments with the benefits of digital currencies and without the risk of volatility. Through the Tap app, users can now access and purchase USD Coin (USDC) as well as Tether (USDT). The sleek design of the app interface makes it easy for users who want to buy or sell cryptocurrencies with fiat currency through their phones in a click.
When it comes to choosing a stablecoin, consider the projects behind it, the liquidity and the ease of use in terms of wallet compatibility.
If you're looking to earn extra money from anywhere online you've come to the right place. Making money online has certainly become more accessible and easier over the years, and in this blog, we're reviewing several ideas to do so without having to invest.
Whether you're looking to make some money on the side, or as a full-time pursuit, remember that as with most things in life: consistency is key. On this page, you'll find a number of beginner options requiring no particular skillset (only a bank account) for you to look into, relevant everywhere from the United Kingdom to the European Union to Australia. Each method varies in financial contribution, which we've highlighted at the end with a rating of the start-up costs.
Top 5 ways to make money online for beginners
1. Affiliate marketing
Affiliate marketing involves an individual earning money through promoting another business's product. This can be done through your own platform which might range from a blog to a website, social media, email campaigning or simply Google Ads.
All you need is a working internet connection, a bank account and a reliable browser. Each time a friend or family clicks and signs up for the product, you bank a commission.
Many companies these days offer this service, try to find one that you and your network might be interested in and see the opportunities that they present.
Start-up Costs: $
2. Dropshipping
This will require a substantial amount of effort, however, the returns will be that much greater. Dropshipping involves selling a product online that you do not need to keep an inventory of, instead, the company that you are buying the goods from sends them directly to the customer.
You act as the middleman between the manufacturer and the consumer and make money from the margin that you add. The start-up costs will be for your online website and marketing.
Start-up Costs: $$
3. Freelance your skills
You can hire out your skills on sites like Upwork or Fiverr. Users create profiles expressing their skills, anything from writing to graphic design to music creation, and can apply to jobs requiring these skills.
These sites will typically allow employers to connect with employees, and once the work is completed the funds are deposited directly into your account. This is also a great way to start a side hustle in your area of expertise without having to tuck into your savings.
Start-up Costs: zero
4. Explore the world of cryptocurrencies
Engaging with cryptocurrencies has gained significant attention in recent years. Before diving in, it’s important to educate yourself thoroughly to grasp the complexities involved. Our blog section on how to learn about crypto is a great place to begin. The cryptocurrency market is known for its high volatility, which presents both risks and opportunities. Whether you're active daily or only occasionally, understanding the landscape is key. To get started, consider signing up for a reputable and regulated platform like Tap, which can help you manage your funds securely.
Start-up Costs: $$
5. Participate in online surveys
Online surveys are a popular way for beginners to make money online. Companies are always looking for feedback on their products and services, and they are willing to pay for it. There are several websites that offer paid online surveys, such as Swagbucks, Survey Junkie, and Toluna.
To get started, simply sign up for an account, complete your profile, and start taking surveys. You'll earn points or cash for each survey you complete, which can be redeemed for gift cards or PayPal payments. Keep in mind that surveys may have specific demographics, so you may not qualify for every survey. However, with some patience and consistency, you can earn a decent amount of extra income in your spare time.
Start-up Costs: zero
Earn money online from anywhere in the world
Of course, this list is only a small portion of the ways you can make money online, simplified down to the top 5. If you have more time at your disposal you can engage in market surveys, beta testing, becoming a virtual assistant, or even coaching.
The opportunities are endless, with a wide range of start-up costs, time management, returns and the amount of effort required are to be considered. Ensure you do adequate research in order to learn about your next venture before diving in. At the end of the day, anyone can earn money online, the first step is just to get started. Good luck, may you have only lucrative experiences.
5 tips on how to manage your money
Now that you’ve established your income stream/s, here are 5 tips on how to manage the money you’re making. Whether you’re doing this as a side hustle or a full time job, consider implementing the following 5 steps in order to build your finances. .
- Build an Emergency Fund
Just like in personal finance, building an emergency fund is crucial for making money online. This fund will act as a safety net in case you hit a rough patch, and it will allow you to continue your online work without financial stress.
- Create a Budget
Budgeting is another essential aspect of making money online. Creating a budget will help you keep track of your income and expenses, and it will allow you to make informed decisions about where to allocate your resources.
- Focus on Your Niche
To make the process of making money online more enjoyable consider focusing on a specific niche that you are passionate about. Whether it's writing, graphic design, or web development, become an expert in your field and provide value to your clients.
- Network and Build Relationships
Building relationships with other professionals in your industry is a valuable step when making money online. Networking can help you find new clients, build your reputation, and even lead to new business opportunities.
- Stay Consistent and Persistent
Making money online takes time and effort, and it's important to stay consistent and persistent. Set realistic goals for yourself, create a schedule, and stick to it. Remember that success doesn't happen overnight, so don't get discouraged if you don't see results right away.
So what are you waiting for?
For all those curious about the crypto industry ready to dip their toe in the water, this one is for you. Below we share a warm welcome to the industry with a range of helpful resources covering everything from what cryptocurrency actually is to how to buy and store it. For individuals and businesses alike, let's get into it.
What Is Cryptocurrency?
A great place to start for any people who are crypto-curious, let's cover the basics. Cryptocurrency is essentially digital cash that can be transferred from one person to another without having to rely on an authoritative entity (like a bank or government or financial institution).
This peer to peer cash system is supported by blockchain technology, a technology that facilitates the transactions and essentially acts as a giant public ledger where anyone can view any transactions that have been made on the network.
Through the use of blockchain, a decentralised network (meaning that no one is in charge, rather everyone follows the same protocol) of computers is responsible for verifying and executing transactions. Depending on the network this can be done in a few seconds or up to a few minutes, causing big waves in the traditional financial sector.
If you take away just four points from the above, let it be
- Digital cash
- Peer to peer
- Blockchain technology
- Decentralised
Cryptocurrency gets its name from cryptography currency, as it uses encrypted code (cryptography) to secure and maintain the network.
Each cryptocurrency will have a value, based on what it was last traded for, a market capitalisation, a circulating supply and a ticker symbol. The ticker symbol would be BTC for Bitcoin and ETH for Ethereum.
Let's Take A Look At The Three Biggest Cryptocurrencies
You've definitely heard of Bitcoin, but what about the other top cryptocurrencies? Below we give a very quick breakdown of the other big projects on the scene based on the biggest market caps. When learning about new coins we strongly advise that you do your own research before making any purchases.
Bitcoin (BTC)
A digital cash system that facilitates the quick and cheap cross-border transfer of money.
Ethereum (ETH)
A blockchain platform that allows developers to create their own decentralised applications on top of theirs.
Tether (USDT)
A stablecoin, meaning that its value is pegged to a fiat currency, in this case, the US dollar. 1 USDT will always be worth $1. Stable coins are a great way to enter the market as they are less volatile than traditional cryptocurrencies.
How To Store Cryptocurrency
Similar to fiat currencies, cryptocurrencies need to be stored in a wallet. As the currencies are entirely digital, so too must the wallet be. Each cryptocurrency operates off a different network, requiring one wallet for each network.
For instance, you cannot store Bitcoin in an Ethereum wallet as Bitcoin runs off a separate blockchain. Different to fiat wallets, digital wallets are how transactions take place. From your wallet, you will enter the crypto wallet address of the recipient and execute the transaction from there.
To purchase and accumulate cryptocurrency, you will first need a wallet. There are a few different types of wallets, but let's keep it simple for now. On Tap, a fully regulated crypto app, users are automatically given a range of wallets, one for each supported cryptocurrency on the network. This allows users to buy, sell, trade, store and manage many cryptocurrencies from one secure app. Simply head to the Tap website and conveniently download the relevant app from there.
How To Buy Cryptocurrency
Buying cryptocurrency used to be a complicated endeavor however with new products on the market it has become simpler and easier to do. Tap's mobile app is a classic example. Buying crypto Tap has never been so easy all you need to do is to create an account.
You will then be asked to confirm your identity through a process known as KYC (Know Your Customer). This is a common practice required by any entity facilitating the sale of cryptocurrencies. The process is entirely integrated and will require you to submit a picture of an identification document and a selfie of you, easy stuff.
Once your account is created, you can then deposit funds. This can be done through debit card or bank transfer. Simply load your fiat wallet with the currency of your choice for free, using a debit card or a bank transfer as a payment method of your choice.
With a loaded fiat wallet, you are then able to go shopping! Under Assets on the home screen, select Crypto, then find the cryptocurrency you would like to purchase. Simply click Options, then Buy once you are on the cryptocurrency you would like to purchase. The process is as simple and easy as it sounds.
After buying crypto, the funds will be deposited into your wallet in a fraction of a second once the transaction has been confirmed. Not too complicated, was it? Submerge yourself into the world of crypto today with the Tap app, head to your Google Play or Apple app stores to get started straight away.
In this article, we’re guiding you through the intricacies of the e-money licence: what it means, who needs one and of course, how it affects you, the consumer. This new wave of regulation has been put into place to not only safeguard the consumer but also to put measures in place to identify and stop fraudulent activity.
What Is Electronic Money (E-money)?
Before we dive into the licencing requirements, let us first take a look at what electronic money is defined as. Essentially, e-money is a digital version of cash. It maintains a monetary value that can be used to make payments and various transactions, typically over the internet, or through a phone or card.
E-money products are either software-based or hardware-based and are responsible for electronically storing the monetary value. Software-based products are used on computers and tablets and require an internet connection (like PayPal for example) while hardware-based products encompass cards that have a chip card and do not require an online connection (for example, Square).
What Is An E-money Licence?
The e-money licence is a regulatory licence that authorises an electronic money institution (EMI) to conduct business. EMIs represent the digitisation of financial services and are authorized to issue money as well as provide payment cards, e-wallets, and IBAN accounts. While banks may provide a similar service, they require an alternative licence as they are able to provide a greater range of services.
In a nutshell, an EMI is considered as such if it engages in the issuing and redeeming of electronic money (e-money), cash withdrawal, deposit and payment services, remittance services, debit or credit transfers, payment initiation and execution services, and account information services. They may conduct these services only if they have the proper licensing.
How Does It Protect The Consumer?
While regulation and consumer protection are the driving force behind e-money licences, there are also several other reasons as to why the regulatory framework has been put into place. The licence is designed to provide businesses with the opportunity to gain access to the e-money market, to facilitate innovation in secure e-money services, and to build healthy competition in a secure market.
E-money licences are obtained to safeguard a consumer’s funds should the EMI become insolvent. This operates in an entirely different manner to a banking licence. Under the proper regulation, EMI’s can choose to do either of the following options to safeguard consumer funds (funds provided by customers in exchange for the issuance of e-money):
- deposit the funds into a segregated client’s funds account with an authorised credit institution, or
- acquire insurance that will cover the risks associated with the client’s funds.
This ensures that the consumer is always protected against loss of funds, and will be compensated accordingly should the situation present itself. It is imperative that consumers only choose EMIs with the correct e-money licences.
How Much Money Is Protected With The E-Money Licence?
According to the FCA regulations, the EMI is responsible for establishing the appropriate organisational arrangements to ensure that the safeguarded funds are at all times protected.
As mentioned above, this can be done by either storing the deposited customer funds in a separate account (different from the institution’s working capital and other funds) or by ensuring that they are covered by an appropriate insurance policy or comparable guarantee.
While licenced banks work in conjunction with the Financial Services Compensation Scheme (FSCS) and only insure users up to ￡85,000, EMIs are required to protect 100% of the consumers’ funds.
According to the licence, EMIs are required to safeguard all funds deposited on the platform and not just a portion as per the licence required by the banks.
While EMIs take several other precautions to protect consumer funds, the e-money licence ensures that the most fundamental legal requirements are met, granting the company the right to legally operate.