Congress introduces ‘Gold Standard Bill’ to stabilize USD
- Three US lawmakers have introduced the Gold Standard Bill.
- Should the bill pass, it will make a shift in the economy that underlies the handling of the dollar.
The US is currently on edge with its fiat currency, the dollar facing one of its most existential threats in nearly 80 years of its dominance. In an effort to help the dollar regain its value, three US lawmakers including Alex Mooney, Andy Biggs and Paul Gosar introduced a bill that would help restore 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 amount of gold. There was a time when the gold standard was popular in the United States and around the world, as it was the basis of the international monetary system from the 1870s to the early 1920s, and from the late 1920s to 1932.
Lawmakers want to revert back to that era, as they believe the stability of gold can help curb the consistent decline in the value of the US dollar. If passed, both the US Treasury Department and the Federal Reserve would have two years to adjust to the new system and should set a new pace that is likely to be adopted by other countries as well.
The economic downturn of recent years has put many nations, including the United States, a long way behind. The spike in inflation that accompanied the COVID-19 pandemic and the accompanying printing of dollars to hand out as palliatives helped weaken the purchasing power of the dollar by a small measure.
According to reports, the dollar has lost approximately 40 percent of its value over the past 23 years and 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 US dollar has pushed former US President Donald Trump to say that the fiat currency could lose its status as the world’s reserve currency, a comment that has drawn many permutations from experts in the financial world.
Although there are some experts who believe that the gold standard is a better system than what is currently practiced, it is a ongoing shouting within different quarters that Bitcoin (BTC) can also benefit from this exchange.
“A gold standard will 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 bureaucrats’ instincts. No longer would American families, businesses and the economy as a whole be at the mercy of the Federal Reserve and ruthless Washington profiteers.
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While the gold standard appears to be a solution for now, as Michael Saylor whose firm MicroStrategy Incorporated recently prefers acquired several Bitcoin entities believe Bitcoin has the technological base to serve as a reserve currency for the world.
Meanwhile, while the demand for the gold standard does not affect Bitcoin’s price in a bullish way, it certainly has the potential to drive a long-term price rise.
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