Gold as a currency – How flexible can precious metals be when it comes to payment transactions?

The flexibility in the use of gold in regular payment transactions is directly related to the denomination. Harald Seiz, founder and CEO of Karatbars International GmbH, advocates small quantities, so-called microbars in GoldCards or in banknotes. In his developments, he refers to the past of the precious metal and argues that gold has always been a currency accepted across borders and countries and that the significance of gold will be of enormous importance in the future.

Think Big

Gold as a currency that is stable in value and unaffected by external influences

With every crisis, every political decision and every problem on the conventional financial market, the demand for gold grows. The precious metal is currently mainly used as a tangible asset in the investment portfolio, where it serves as a hedge for times of crisis and as an investment for old-age provision. However, the large quantities issued by banks and precious metal traders are not suitable for payment, but must be exchanged into a valid currency before they can be used. This results in additional costs and immense effort for the owner, which can be avoided with small denominations and the focus on gold as a currency. In the recent past, there have been some periods in which the demand for gold has risen steadily and there has been a real hype about the precious metal. These include Brexit, the discussions about the abolition of cash and the current policy in Germany, which is causing concerns and fears about the future among the population. Memories of the Lehmann Brothers crash and the ECB’s current and future loose monetary policy are further factors that have sparked interest in gold and contributed to increasing its significance. All in all, the precious metal is more than just an investment product for many reasons. Divided into very small quantities, gold can establish itself as a visionary currency of the future and create liquidity for every human being that is independent of the conventional financial system and its influences.

State currencies, so-called debt money currencies, are fleeting according to Harald Seiz. Past inflations, currency changes and the crashes of existing financial systems at regular intervals have amply demonstrated this. Regardless of this and of what has happened in the world, gold has remained stable in value and has been the only truly safe and liquid currency in crisis situations.

Gold as a means of payment: The financial system needs a new direction

Our current financial system is based on a promise that the value printed on a banknote will be redeemed in exchange for goods and services. But promises are no guarantee and can be “broken”. A good example of this is the Big Depression of the 1920s. From one day to the next, money was worth nothing and only those who owned gold and could use it as a medium of exchange were solvent. In view of this historical fact, focusing on the stable value of gold and with concerns about an uncertain future, it becomes apparent how important gold is as a currency. Those who opt for a currency in gold make themselves independent of the conventional financial economy and choose a crisis currency that will retain its value permanently.