Benefits of Using Silver Backed Currency



Silver crypto-currency means that the value of money used in the country is derived from the prices of silver in the country.  The government come up with fiat money system where monetary value is determined by the authorities.  The good thing about silver backed currency is that the government does not play any role in the value of money used in a country.  Thus silver backed currency ensures that money value is not affected by so many external factors.  This is because the supply of silver is the primary factor that will determine the value of money under the silver backed current.  The following are the merits of using asset-backed assets.

 Silver asset back currency is essential to countries that aims to regulate the amount of money in circulation in the economy at any given time. This is very important because excessive money supply leads to high levels of inflation.  High levels of inflations means that the country's money loses value. Whereas low money supply leads to deflation.  Countries with high levels of inflation or deflation will have adverse economic conditions.

All these things can be avoided by using silver backed currency. This is because silver is limited in supply thus the only way to increase money supply is to increase silver mining activities. Thus this helps in the stabilization of the economy.  Many of the countries experiencing unstable economies is due to using a currency system that is not backed by a physical commodity.  This is because the loss of value of money may be caused by the activities undertaken by the government.  This creates a need to solve these negative economic conditions by using silver-crypto-currency. Know more about cryptocurrency at https://www.huffingtonpost.com/topic/cryptocurrency.

Asset backed currency also helps in the prevention of economic bubbles. This is because the values of money is based on tangible assets such as silver that has fixed quantity of supply in the economy.  The essence of avoiding economic bubbles is that many people end up losing their wealth and accumulating debts. This is because to a sudden increase in value of an asset that many people borrow money to acquire.  The banks are able to give huge amounts of money as debt. Then it reaches a point where the asset value makes a sudden drop in value where all the people who invested in it make very huge losses.  The use of asset-backed currency is ensured to preventing economic bubbles.  The scarcity of silver is what makes it ideal for Silver Currency.  This means that all the assets in the country will have a stable value because there is stable demand for money is also limited in supply.  Silver backed asset helps to avoid rapid increase in value of assets that cause the economic bubbles and collapse.

Comments: Leave Comment

* The email will not be published on the website.
This site was built using