The economic crises that the world has experienced during the current period may push the economic systems to return to the gold standard to overcome inflation rates and control the value of currencies.
The gold standard or the international gold system is a financial system in which gold is used as a base to determine the value of the paper currency.
Based on this system, the currency of a country was evaluated, and the country that adopts the system converts any currency it has into gold after agreeing to adopt Agrees to adopt fixed prices for buying and selling gold.
The Central Bank of Zimbabwe had announced the offering of gold coins to citizens starting July 25 as a store of value with the aim of stabilizing the declining exchange rate in the country and providing an alternative to the US dollar, which is in high demand.
The bank is scheduled to launch a 21-karat gold coin weighing 31.10 ounces, under the name of the gold “Mossi Awa Tonya” coin, which means “rumbling smoke”, in reference to Victoria Falls that crosses Zimbabwe and Zambia, according to Bloomberg.
The price of the currency will be determined according to the gold price in global markets and the cost of production, and the currency can be easily converted into cash and traded locally and internationally, and used in commercial transactions.
It is noteworthy that the United Kingdom was the first country to adopt the gold standard in 1821 AD, then many Western countries followed it.
Since 1930, the role of gold in the global monetary systems has diminished, and its influence has disappeared in the late seventies of the twentieth century when it was replaced by another system called stabilization to evaluate their currencies.
Contributed by Israa Farhan
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