What is the relationship between CBDCs, central bank digital currencies, and the gold standard? Is the narrative of this system that ended in 1971, giving rise to fiat money, being revived? the podcast 'The Voices of Satoshi', the illustrious Jaume Vicent and Iván 'El Sentencias' Navascués, addressed this new economic vortex that is beginning.
In recent years, CBDCs have gained popularity among governments and financial institutions around the world. These digital currencies are issued and backed by a country's central bank and are used as a means of payment and store of value. However, some question whether there is any relationship between CBDCs and the gold standard, as in 'The Voices of Satoshi'.
To recall, the gold standard was a monetary system used in many countries until the 1930s, in which the value of the currency was backed by a specific amount of gold. This system was largely abandoned due to its rigidity and the difficulty of maintaining an adequate supply of gold to back the currency, and came to an end in 1971.
In contrast, CBDCs are not backed by gold or another physical asset. Instead, their value is based on trust in the issuing authority and its ability to maintain an adequate supply of the currency and control its value. Although CBDCs are not directly related to the gold standard, some similarities can be seen.
For example, many people believe that CBDCs could play a similar role to gold as a safe haven asset in times of economic crisis. Some have suggested that CBDCs could be backed by assets such as gold or silver to increase their stability and value.
However, many economists argue that CBDCs do not need to be backed by gold or any other physical asset to maintain their value and stability. Instead, they argue that the central bank’s ability to control the supply of the currency and maintain confidence in its value is enough to support the currency.
