There’s something about gold – its visual appeal, its rarity, its elegance, that has made it a symbol of value since time immemorial. Ancient civilizations from the Aztecs to the Egyptians used it to make stunning artifacts, and by at least the 7th century BC it started being melted into coins. It was the natural option to be used as money: malleable, durable, and rare but not too rare.
Gold has preserved value since then, and in recent centuries it has been used by governments as money, or to back their paper money: the “gold standard.”
When the gold standard was largely abandoned after WWI, economies around the world switched to a fiat system. That basically meant their money – be it the US dollar or the Pound sterling – would be based on trust in the government’s capacity to maintain the value of paper bills or coins, without that value being backed by a physical commodity (e.g. gold).
But financial instability has since risen, as this system allowed governments to print money and extend credit without being limited by the amount of gold in their coffers.
While recessions happen every few years, and the US dollar’s value rises and falls, gold remains a trustworthy store of value the world over. Gold’s value has grown 500% in the past 20 years, while the US stock market (S&P) has only increased by 80%, and the US dollar’s purchasing power actually fell. Gold quickly recovered after the ground-shaking financial crash of 2008 and climbed to its highest value in years in the midst of the 2020 coronavirus pandemic.
That’s because when our financial system wobbles, people seek out stores of value they can always rely on. This means that economic turmoil can actually drive the price of gold through the roof.
The economic crisis precipitated by the coronavirus showed us that even traditional stores of value are not as reliable as we once thought. US Treasury bonds – a typical “safe haven” – saw a drop in value in 2020, with the US government stepping in to try and mitigate the damage. New potential “safe havens” – cryptocurrencies such as Bitcoin – are dangerous bets. Their value might rise for a while during periods of uncertainty, but that’s largely because people speculate about them being safe havens, not because they are. Eventually, the fact that they have no underlying value catches up with them, and they return to their volatile state.
Gold can help economies ride through rough waters, and has enormous potential to help regular citizens protect their own money by converting it to gold. Gold represents a currency like any other: XAU, and can be exchanged for currencies around the world. It’s right at our fingertips if we’re empowered to reach for it. But it has not been accessible to the public at large until now.
Coro is launching a digital payment app that will allow all users to use gold as currency as easily as fiat currencies. Coro will help bring gold back into the financial system and enable fair, accessible, and stable transactions for everyone.