British company Revolut recently allowed buying and selling gold for Premium and Metal members. In a blog posted on its website, the company said that it is entering the precious metals sector through exposure. However, it also warned that this offering comes at a risk.
The fintech firm took this move to make such trading accessible to more investors. While doing so, the company seeks to offer a safe, efficient and easy-to-understand platform for gold exposure. According to Tech Crunch, this offering falls under a new feature called Commodities.
In explaining its new offering, Revolut said that qualified users will only be able to sell and purchase exposure to the metal. This means that users who purchase the metal will not receive actual gold through mail. Instead, their account will be credited with the “corresponding value based on what the market is doing at the time the transaction is executed.”
When buying the metal, users only need to provide the amount they want to allocate for the purchase and the platform will inform them how much exposure they can have. A reversed version of this process is also available, letting customers sell their exposure.
As of this writing, Revolut does not limit how much metal one consumer can access.
‘Not regulated’ by the FCA
The company clarified that such transactions are not covered by the United Kingdom’s Financial Conduct Authority (FCA). This is because the FCA is focused on digital cash, which Revolut users have on their accounts. According to the post, gold is not the same as e-money.
Furthermore, the firm warned that funds resulting from such transactions and the gold itself “will not be safeguarded under the UK Electronic Money regulations 2011, or the Payment Service Regulations 2017.” Moreover, those who would buy the metal through the platform will not be covered by the Financial Services Compensation Scheme.