Is the world finally ready for a digital gold standard?

Ever since the then US President Richard Nixon killed the gold standard, fiat money has been in free fall. By one estimate, all the printed dollar notes in existence, around 80% were printed in the 2020s itself and the decade is not even half done. Wrap yourself around that! The truth is that with the way politicians handle finance, most people have lost faith in the monetary system.

One of the first offshoots of that was cryptocurrency. While most smirked at crypto and predict its death every day the fact is that a Bitcoin is still worth a whopping $90K today. While people talk of crashes (what monetary system has never seen crashes by the way?) the truth is that crypto is worth trillions of dollars. Enough people have faith in it to make it work.

Critics of fiat money and crypto are pushing for the return of the gold standard. Especially after the recent tariff war, economists want to do away with the dollar as the reserve currency. But what will replace it? The Chinese Yuan will be opposed by many. The Euro did not live up to its potential. The BRICS currency shows great promise but is still half-baked.

The rise of gold

All this means that gold is rising steadily. Recently it crossed the neat landmark of Rs 1 lakh for 10 grammes. I remember growing up in India in the 1980s when early in the decade 10 gms was Rs 1000+. That’s like a hundredfold increase. Will the tariffs really destroy America’s place in the global financial order? Can the gold standard really make a comeback? Interesting questions indeed!

Tech enabled gold

Indians have been hoarding gold for centuries. But in the past, it was no seamless. There were making charges and breaking charges. Then you might find that the quality of gold brought down the price of gold severely. Only the jewellers seemed to be getting richer.

But when it comes to investments, gold has totally changed. You no longer need to buy and hoard ornaments. You can buy gold bonds. You can trade gold in:

1. Exchange-traded funds (ETFs)

2. Closed-end funds (CEFs)

3. Exchange-traded notes (ETNs)

These “gold exchange-traded products” are present on all the major stock exchanges. You personally don’t have to hold a gold bar in your home.

This “digital gold” is easier trade online and track. AI-based automated trading means that these gold investments are as sophisticated as your other stocks. People are also pushing gold based cryptos and blockchain solutions. That also sounds quite interesting.

The gold standard thrived in the 19th century and virtually died in 1971. Can the digital gold standard make a comeback in the tech world of today? Who knows!