In 1931, the UK abandoned the gold standard. The system, which had for over a century pegged the value of £1 to 7.98 grams of 22-karat gold, was now over – and people were free to buy and sell sterling for whatever value they thought it was worth.
Since then, gold has ceased to be used in conventional currency, but as of the last few months – it could be making a comeback as an alternative currency.
Glint Pay
Glint Pay is a new start-up business, with an app that lets you pay for products using gold. In many ways, it’s similar to paying with Bitcoin, or other alternative digital currencies that have sprung up over the last few years. It allows customers to buy a certain amount of ‘credit’ on the app – which is redeemable for a physical quantity of gold, held in a Swiss vault.
With the rise of cryptocurrencies, it’s clear that there’s an interest and a desire for alternative digital spending options. The problem is, however, that Bitcoin and others are too volatile to be reliably used as spending currency – at least for now. Glint Pay seeks to offer the stability of gold and the convenience of a digital currency – giving contemporary consumers a modern spin on the gold standard.
The people behind the Glint app aim to reintroduce gold as spending currency. And the reason they’re sure it’ll be a success, is because gold is, in their words, “independent and incorruptible; its value is recognised everywhere.”
Will gold make a currency comeback?
Even if this start-up initiative proves to be a phenomenal success, we’re still likely to be using fiat currency for some time yet. However, it does speak to a wider uncertainty and distrust of modern fiat currencies, with their high inflation rates and risk of rising interest rates.
There’s a reason currencies used to peg themselves to the value of gold – and that’s because the commodity has an impressive ability to hold its value against deflating currencies. That’s why in times of economic and political uncertainty, gold’s value almost always rises markedly.
Another way you can get these benefits from gold is of course through buying the physical commodity – gold bars and gold coins. That way, you can secure your wealth against inflation and don’t have to rely on the redeemable commodity being held by someone else.
