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Frequently Asked Questions About eGold
Is eGold launching its own currency?
NO. eGold also does not wish to engage in any activity prohibited by the laws of the land. As such, we do not intend
to launch any new currency, which is a prerogative only of the federal government. However, the eGold payment system
intends to provide a "barter" mechanism, and conforms to all the existing rules and regulations of the Securities
and Exchange Commission of Pakistan. Barter between commodities is absolutely legal. You can take your old car to the
dealer and exchange that, plus some cash, to buy a new one. The old car is "acting" as a cash substitute. Similarly,
we exchange things between each other with out any doubt that this is entirely legal. Similarly, physical gold,
be it in the form of pendants, rings, or round shapes like coins, is still just a commodity and its ownership can
be exchanged between any Pakistani citizen with another, with no legal hindrances.
You are offering Loss Protection. Is that permissible in Shariah?
Without going into the question of whether guarantees against loss in a business are
permissible in Shariah or not, we need to clearly understand that in our relationship with
the customers, we are not engaging into a business relationship at all. eGold is only offering
"Ammanah" services. (Urdu: Amaanat, English: Trust, Safe-Custody). What this means is that as
a customer, you come to eGold and say, I want to have this 100 units of currency deposited with
you for safekeeping, with the understanding that eGold will convert it into physical gold per the
going spot price of Gold on the day you deposit. Thereafter, you can come back to eGold at anytime, and
request to have your deposit returned to you. What we are saying here is that because you originally
deposited 100 units of a currency, at the time of asking back for it, we give you the option to
either have it returned to you in the original form you deposited (100 units of currency), or else
have it returned to you in the form of Gold, to which we had since converted it. The concept of
loss protection is that even if the price of Gold falls, you are entitled to what you originally
gave us for safe custody.
How do you claim that central banks do not fulfil their obligations?
We have claimed that all central banks in the world, violate a fundamental moral and religious principle,
which is to "fulfil their obligations". An obligation is a commitment which you have made to someone i.e.
you have said that you will do something. And so you must do it, and honor your word. Central banks
around the world make a commitment to their public, and do not conform to it, which is how they
violate their committed obligation, and which is why we have said that the moral and religious
crime of not "fufiling your obligations" applies to them. Specifically, this obligation is to return
to the bearer of their issued note, the value equal to the that printed on that note. Central Banks refuse
to redeem their issued notes with the actual "value" printed on the notes, whereas they are obligated to
redeem it in currency notes issued by "the Government" instead of the Bank itself. Because Banks issue
more of these "demand notes" then the government has ever issued currency, they are technically
making promises about which it is known that they cannot be honored.
Where does eGold store physical gold and silver bullion?
In order to ensure maximum security and protection, we diversify our storage locations, so that there is no
single point of failure. Our storage strategies include, but are not limited to, the following:
- At third party bank lockers, operated by different networks
- At dedicated bullion storage facilities like www.e-dinar.com
and www.goldmoney.com.
- At storage facilities provided by regulated commodity exchanges like NCEL
- At eGold's own dedicated storage facilities
In interest-free banking, how will you ensure that borrowers pay your money back?
It is a misconception to think that charging of interest is somehow related to ensuring payback by the borrowers.
The assurance that a borrower will pay the loan back, is done by credit checks, examining the intent and solvency of
the applicant, and other due deligence done by the lender on individual basis for each application. This is the same
process that eGold will employ, so making sure that honest, and credit-worthy people are granted the loan. Once
the loan is granted, interest merely contributes to the bank's profit, and has no role in assuring payback. If
a borrower fails to pay, the bank will first wait to keep charging interest, and then finally, turn over the case
to collection agencies, or law enforcement authorities and civil law proceedings. Law enforcement is what eventually
makes sure that the money owed is paid back. eGold will follow the same law enforcenment route, except that during the
time installments stop coming, and the matter is handed over to the authorities, we will not charge any interest.
However, the longer the borrower will take to pay back, the more difficult it will become for him, because eGold
loans will not be in cash, but in commodities (gold and silver) and their prices keep rising.
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