- Three US lawmakers have introduced the Gold Standard Bill.
- Should the bill pass, it will make a shift in the economics underpinning the handling of the Dollar.
The United States of America is currently at the edge with its fiat currency, the Dollar is facing one of its most existential threats in close to 80 years of its dominance. In a bid to help the dollar regain its value, three American legislators including Alex Mooney, Andy Biggs, and Paul Gosar have introduced a bill that will help reinstate the Gold standard for the US Dollar.
The gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. There was a time the gold standard was popular in the United States and around the world as it was the basis for the international monetary system from the 1870s to the early 1920s, and from the late 1920s to 1932.
The lawmakers want to reverse back to this era as they believe the stability of Gold can help in cushioning the consistent slip in the value of the US dollar. If passed, both the US Treasury and the Federal Reserve will have two years to adjust to the new system and should set a new pace that might likely be adopted by other countries as well.
The economic downturn of the past few years has set many nations, including the US behind by a large mile. The inflationary surge that accompanied the COVID-19 pandemic and the accompanying printing of dollars to dish out as palliatives helped weaken the purchasing powers of the Dollar in no small measure.
Per reports, the Dollar has lost approximately 40 percent of its value over the past 23 years and by more than 97 percent of its purchasing power since the introduction of the Federal Reserve Act of 1913.
Gold standard implications for Bitcoin
The current state of the United States Dollar has pushed former US President Donald to say that the fiat currency might lose its status as the world’s reserve currency, a comment that has drawn in a lot of permutations from experts in the financial world.
While there are some experts that believe the Gold standard is a better system than what is currently being practiced, there is an ongoing clamor within different quarters that Bitcoin (BTC) can also benefit from this switch.
“A gold standard would protect against Washington’s irresponsible spending habits and the creation of money out of thin air,” Congressman Mooney said in a statement adding that,
Prices would be shaped by economics rather than the instincts of bureaucrats. No longer would American families, businesses, and the economy as a whole be at the mercy of the Federal Reserve and reckless Washington spenders.
While the Gold standard appears as a solution for the now, proponents like Michael Saylor whose firm MicroStrategy Incorporated recently acquired more Bitcoin units believe Bitcoin has the technological base to serve as a reserve currency for the world.
While in the interim the clamor for the Gold standard is not impacting Bitcoin’s price in a bullish manner, it certainly has the potential to drive a price surge in the long term.
