A Toronto-based startup is planning to launch a new payment method that enables the direct buying and selling of physical gold and will appeal to e-commerce merchants by undercutting credit card transaction fees.

BitGold Inc. is working towards closing its first year of operating as a publicly-traded company at the end of May. It’s already signed up about 700,000 users that are buying and selling gold by using a smartphone app. Now it’s planning to launch business services that will include the ability to accept payments, invoicing, and a developer API.

Formerly PayPal’s managing director for Canada, Darell MacMullin is now chief executive officer of BitGold. He met founders Josh Crumb and Roy Sebag ahead of its merger with GoldMoney Inc. last year, a $59.4 million acquisition.

“They said, ‘there’s these two guys in Toronto and I don’t know if they’re brilliant or crazy or probably both, but they think they can create a whole new global payments network for gold,” MacMullin recalls. “I was brought it to kind of assess them, and assess the business opportunity.”

Here’s how it works – BitGold’s proprietary Aurum software enables a global network that allows its users to find the best price for gold in one of its vault locations and then purchase that gold in amounts of as little as three cents.

Darrell-MacMullin BitGold CEO
Darrell MacMullin was formerly the Canadian lead for Paypal.

It enables global payment processing by working with banks and companies like Visa and MasterCard so users can buy gold in their local currency. That gold is stored in one of 100 different vault locations around the world, operated and insured by Brink’s.

As Crumb, a former senior metals strategist at Goldman Sachs and BitGold’s chief strategy officer puts it: “We’re software. Brink’s are the guys with guns guarding your gold.”

Every time money moves in and out of gold, BitGold charges a one per cent transaction fee. That’s also what it will charge merchants accepting payments on the business, which looks better than the fees of between two and three per cent associated with credit card transactions.

A GoldMoney MasterCard already allows BitGold members to use their gold for payments. Other uses of the payments network today include peer-to-peer money transfers across international borders. Users could also choose to accrue their savings in gold, which has historically been a stable investment, or even have their physical gold shipped to them in 10 gram cubes or gold bars.

Most importantly, Crumb says, it’s all legal and well within regulatory compliance. BitGold works with KPMG as a third-party auditor, and complies with bank-grade Know Your Customer regulations. The company is positioning itself as an alternative to BitCoin that is friendly with regulators, so the name is no accident. Before starting BitGold, Crumb says he appreciated the problems Bitcoin was solving in the financial industry, but also saw its shortcomings.

“We didn’t like the underlying token,” he explains. “We said let’s try to build a Bitcoin network using gold and call it BitGold.”

Josh Crumb was an analyst with Goldman Sachs before founding BitGold.
Josh Crumb was an analyst with Goldman Sachs before founding BitGold.

For MacMullin, he compares it to the disruption Napster caused in the music industry by providing easy and free access to music, although its original incarnation was eventually shut down in the ’90s because of copyright violations. Later, Apple’s iTunes would use the same model to sell songs for a buck apiece, working with the music industry to modernize access.

BitGold for Business is already taking registrations and has about 600 names on its waiting list. Those that support it will offer customers the option of paying with a BitGold Checkout button, similar to PayPal’s.

For now it remains a closed platform, but BitGold is planning to work with developers by releasing an API as early as this summer.

“Now they have a payment rail that’s global and ubiquitous and already has a lot of users on it,” MacMullin says. “It could be anything from if you’re a wallet that wants to add another payment type, or you’re a payroll software, or invoicing software, or point of sales platform.”

Running BitGold in Canada

BitGold could have gone the way of most technology startups and rooted its headquarters in Silicon Valley, McMullin says. But it consciously chose to stay in Toronto because it seemed like the better move.

There’s a lot of talent with deep expertise around gold in Toronto, he says. The firm hasn’t had trouble finding funding either – often a complaint of Canadian startups – raising $30 million from investors including PowerOne Capital and Brothers Investments.

So far BitGold has no formal ties to Silicon Valley, and that’s intentional, MacMullin says. “It’s kind of by design, to be honest with you. If we set up there, there’d be 100 copycats already.”


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  • Javier Atun

    This is pretty cool, I knew that bit.do/Uphold had launched fee-free GLD purchase through bank cards, bitcoin, or transfer, but I don’t think they physically delivered. You have to cash out again through one of those methods.

  • Jay Pee

    I got bonus gold from bitgold by using this link BitGold.com/r/4LIujw