Recently there was news that a British company, Tally, pays its employees in gold. According to CEO Cameron Perry, quoted by Bloomberg :

People are increasingly faced with the devaluation of fiat money , at the heart of the debt-based monetary system. Gold has always been used as an anchor that provides stability in times of fluctuations in the money supply. That’s why we use gold, everyone knows it’s valuable.


Perry’s reasoning is absolutely correct . The UK’s official consumer price index rose 9.4% year-on-year in June, the biggest increase on record . The actual depreciation of the local currency is even higher. Thus, from June 2021 until the end of June 2022, the price of gold in sterling increased by 14.17%. In conclusion, it is normal for people to prefer a stable asset like gold over the pound or any other currency.

But are Perry’s underlings really getting paid in gold? The news on this topic is just a pretext to discuss in this article what is meant by allocated gold accounts and unallocated gold accounts and stablecoins. For better clarification, I mention that the capitalized term refers to the company name, while the lowercase word refers to the cryptocurrency. At the same time, the purpose of this text is not to provide investment advice, evaluate the company or comment on the value of this investment tool. The information is presented for informational purposes only, especially as most readers will not be able to purchase tally as this product is only available to UK residents.

What is a stable cryptocurrency and especially the tally?

A stablecoin is a cryptocurrency whose value is determined and backed by other assets – a fiat currency, a basket of currencies, gold or something else. For example, when Facebook announced years ago that it wanted to have its own stablecoin, Libra (later renamed Diem), it had to be backed by a basket of fiat currencies and US Treasuries. The idea is to thus avoid the high volatility specific to cryptocurrencies. Also, it’s one of the reasons why they can’t be used for payments. If you don’t know how much a financial instrument will be worth tomorrow, you are unlikely to accept it as a payment method.

In this case, the guarantee is at the rate of 1 number = 1 milligram of gold. According to the company’s terms and conditions , the yellow metal is stored in Switzerland. At the time of writing, one gram of pure gold is worth £46.29, meaning one unit of the cryptocurrency is worth around £0.04629. Technically, its price is estimated based on the wholesale value of a one-kilogram gold bar, according to the London Bullion Market Association’s “good delivery” standard.

When someone buys cryptocurrency, they pay for it in pounds or euros. The company does not accept other assets. Let’s imagine that a user wants to buy a number of 1,000 tallies. He will deposit £46.29 into his account. The company will credit its account with 1,000 units of cryptocurrency and order the purchase of one gram of pure gold.

Allocated And Unallocated Gold Account: Which One?

Let’s look at the most interesting aspect, that of the property. There are two forms of digital gold ownership: allocated accounts and unallocated accounts .


As the name suggests, in the case of the first, the investor is the owner of a certain gold bullion or coin , kept in a safe . Storage of physical gold is a service for which the customer pays. Gold can also be delivered, but can generally be sold to someone else without leaving the vault. Even if the company managing the vault goes bankrupt, the physical gold remains in the holder’s possession.

With unallocated deposits, the situation is much different. In this case, the investor assumes that he is buying gold, but enters into a business relationship with a financial lending company that is supposed to buy and store the gold on his behalf . In unallocated accounts, the investor may have various different restrictions, such as the right to resell the gold only to the institution from which they bought it. And if he has the opportunity to demand the delivery of a bullion or a coin, he also has to pay high fees.

In the event of the bankruptcy of an institution from which an unallocated gold account was purchased, the depositor will not receive an actual gold bar or coin. As a creditor, you will have to wait for the sale of goods. One of them is gold. Finally, our investor will receive the dollar equivalent (pounds, etc.) of the gold sold during the bankruptcy proceeding, after the secured creditors (if any) have been paid.

Why would anyone enter into such a transaction when they do not become the owner? Unallocated accounts allow for some flexibility, such as the ability to invest very little money. The smallest gold bar for investment is one gram. Unallocated accounts allow investing in a smaller amount because it is not a specific physical product. It also seems to solve the gold storage problem. Last but not least, since the investor does not become the owner of the product, commissions may be slightly lower than in allocated accounts.

Precious metal ownership and cryptocurrency tally

In the case of cryptocurrency, we are talking about a similar mode of operation to unallocated accounts, at least from the user’s point of view. The terms and conditions clearly state:

“When fiat money is sent to a Tally account, it is automatically converted to a number and each unit of account is an electronic record of ownership and title. per milligram value of physical gold… In the unlikely event of a transaction suspension, all gold delivered by record will be sold immediately and its value in fiat currency, minus a 1% fee for legal mechanism and transaction processing, will be transferred in the customer’s bank account.”

Users cannot convert their cryptocurrencies into gold that they can order or pick up from Switzerland. Even in bankruptcy, the company will sell the metal and pay the equivalent in fiat currency into the account of its customers. It is more accurate to say that Tally pays its employees in a gold-backed asset (if indeed it maintains reserves of one milligram for each unit of the cryptocurrency) rather than in the precious metal.

The idea of ​​paying a salary in gold is very good. Thus , our purchasing power would be preserved in the long term, instead of quickly evaporating . When talking about the precious metal, however, it is important to understand very well how the idea of ​​ownership of what we get works.

In this case, we have a gold-backed asset. At least in theory, this has the potential to make it much more stable than any fiat currency such as the euro, dollar, leu, leva, dinar, lira or almost any other cryptocurrency.

But gold collateral does not mean that users own the actual gold. Rather, they have a claim on sterling corresponding to the value of the metal backing the cryptocurrency. And this is very different from actually owning the physical asset in the form of gold bars or coins or which can be purchased from allocated gold accounts.

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