New Private Currency Uses Bills Filled With Real Gold
“Modern currencies such as Bitcoin expect to find success in a more technological world, but a new currency known as Goldbacks might corner the post-apocalyptic currency market.
In 2019, Goldback president Jeremy Cordon said he had a dream in which he saw people paying for groceries using golden bills. Cordon had previously worked for years trying to make gold into functional money, but the dream gave him a new idea: What if a bill small enough to buy groceries could include a tiny percentage of gold?
“This felt like an epiphany because I saw people using gold as a regular money,” he said. “This fit into the vision that anyone anywhere could use gold as their currency of choice.”
For thousands of years, anyone who wanted to buy goods with gold faced “the small coin problem,” Cordon told The Epoch Times. A 1-ounce gold coin, worth about $2,000, is far too expensive for everyday use, but a cheap gold coin is impractically small.
“Gold is the best money, but it can’t buy a loaf of bread,” he said.
To solve this problem, Cordon used new technology to create a bill that sandwiches a particle-thin gold layer between two layers of polymer—the Goldback. The result can be worth as little as $3.80.
At a time when Bitcoin has devoured most of the private and local currency market, Goldbacks have arrived late to the private currency world. In the 1980s and ’90s, private currencies experienced a boom around the United States, according to University of Central Oklahoma professor and local currency expert Loren Gatch. But since then, they’ve been on the decline.
“That’s something which [has] pretty much gone downhill in the last couple decades,” Gatch said.
Cities such as Ithaca, New York, and Berkshire, Massachusetts; businesses such as coal mining camps; and political groups such as left-wing activists and libertarian anti-government enclaves have all used private currencies.
But even amid a private currency decline, Goldback has $20 million of bills in circulation, according to Cordon. They’re recognized as legal tender in Utah and Wyoming and are legal for use in New Hampshire, Nevada, and South Dakota. This number puts Goldbacks at the top end of what private currencies have ever achieved.
“It’s totally off the scale,” Gatch said. “$20 million is far greater than what I think any of the experiments that I’m familiar with—in the last quarter-century—have ever tried to do.”
Gatch said the idea of filling bills with gold seems like a gimmick. Gold-backed currencies already work when the gold is in a vault, and people still must trust the banker at some point.
“You’re basically not getting away from the problem of public credibility if you issue these currencies that claim to have a little bit of gold in it,” he said. “They could be gold, it could be something else. You have to establish the public’s confidence in it.”
But a post-apocalyptic setting might make the gold inside the bills more valuable, according to Gatch. If all of society were to collapse, it would be better to have gold in hand than in a bank vault somewhere.
Even so, Gatch doubted that people would need gold money after a societal collapse.
“It’s true that if the world collapsed, the dollar probably wouldn’t be worth very much,” he said. “But, man, that’s the least of your worries.”
If society collapses, Goldbacks are made of something that has remained valuable throughout human history, Cordon said.
“You can barter with gold just about anywhere in the world. And that’s part of why people buy gold,” he said. “If it’s the apocalypse, if our electrical grid goes down, you don’t want Bitcoin or dollars.”
Goldback director of sales and marketing Kevan Mills speculates that the dollar’s collapse into worthlessness grows closer every day. Studies show that no fiat currency has lasted for more than four generations.
“We are just getting towards the end of the second generation, if we’re counting from when [President Richard] Nixon canceled the gold standard to now,” he said. According to tech website TechJury, the average fiat currency lasts 27 years, although some exceptions, such as the British pound, have lasted for centuries.”