What is a gold currency?

A currency is a unit of exchange, facilitating the transfer of goods and services. It is a form of money, where money is defined as a medium of exchange, a store of value. Therefore gold is a better money than a currency because it better keeps its purchase power with time. In fact if 50 years ago you could completely dress yourself with 100 grams of gold then today you still dress yourself with 100 grams of gold which is not the case with a currency. Effectively if 50 years ago you could dress yourself with 50$ then today it is not enough because of inflation, so gold is a better money.

QtyUnit of accountCurrency
560CADcanadian dollar
1troy ouncegold

Gold is similar to a currency, that is why many people use the term “gold currency” to talk about gold as a medium of exchange.

A while ago, gold was not as convenient as currency paper as a method of payment because to purchase something for a value of 100USD it is difficult to break off a slice of gold that you carry to that value and hand it over to the merchant. But now with Internet it is not a problem anymore since you can have an online gold account from where you can send a payment of any amount to anybody in the world as you can do with your bank account.

As you can open a currency account with a bank you can open a gold account with corporations (gold currency issuer/supplier) such as e-gold, GoldMoney and Pecunix and then to put gold into your gold account you just have to use an exchange provider as listed in the home page, who make a business simply converting national currencies to gold and visa versa.

Those companies hold in trust a quantity of gold bars corresponding to the total of all their customers’ gold assets and act as custodian on behalf of clients. This gold is in the form of actual gold bars and held in escrow in banks around the world. With this system each account holder, who can be a consumer or a merchant, actually ‘owns’ an amount of that gold inventory and this holding is reflected in his account. Transactional history and balances are available and a small fee is charged for each transaction and for storage.

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