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Sound Money: Why Gold Is Back

In 2025, gold set 53 new all-time highs and global demand passed 5,000 tonnes for the first time, worth around US$555bn. Central banks bought 863 tonnes. Investors added 801 tonnes to gold ETFs.

None of that happened in a vacuum. Governments are carrying record debt, the dollar's share of global reserves keeps slipping, and the old rule that bonds protect a portfolio when stocks fall has stopped working reliably. Put those together and an old idea comes back into focus: sound money.

This article explains what sound money means, why the "debasement trade" became one of the defining market stories of 2025, the three separate reasons people own gold, and why the picture looks different depending on which currency you count in. It ends with the practical problem every gold holder runs into, and the modern answers to it.


What Sound Money Actually Means

Gold in economy politics

Sound money is money whose supply politicians cannot expand at will. Its value rests on something scarce, not on a government's promise to behave. The name comes from an old test: drop a coin and the ring tells you whether the metal is honest or cut with something cheaper.

The idea has deep roots. In 1871 the Austrian economist Carl Menger argued that money is not invented by states but emerges from markets: people settle on the goods that are easiest to trade and hardest to produce. For most of history, that meant gold and silver.

The modern system moved away from that anchor in stages:

  1. The gold standard. Currencies were defined as a fixed weight of gold, which limited how much money could be created.
  2. Bretton Woods, 1944. Forty-four countries pegged their currencies to the US dollar, and the dollar was convertible into gold at $35 an ounce.
  3. The Nixon shock, 15 August 1971. The US suspended the dollar's convertibility into gold. A brief attempt to re-peg at $38 failed, and by 1973 the major currencies were floating. (Nixon shock )

The last formal tie went in January 1976, when the IMF's Jamaica Accords, agreed in Kingston, ended gold's official role in the international monetary system and let its price float freely (Jamaica Accords ). 2026 marks the 50th anniversary. Since then, every major currency has been pure fiat, resting on law and confidence rather than metal, and gold has traded as a commodity.

The idea is now back in the news. In 2025 Texas passed HB 1056 , which recognises gold and silver as legal tender and asks the state to build a payment system so people can spend metal held in the Texas Bullion Depository, converted to dollars at the point of sale (Texas Policy Research ). Florida followed: since 1 July 2026, qualifying gold and silver coins have been legal tender there and exempt from sales tax, though nobody can be made to accept them. Groups such as the Sound Money Defense League campaign for similar laws in other states.

That Texas law points at the central tension of sound money: gold is hard to debase, but it is also hard to spend. We come back to that at the end.

The Debasement Trade

Governments carry record debt, and the least painful way to shrink a debt is to let the currency it is written in lose value over time. That is debasement .

The scale is hard to ignore. US federal debt passed $40 trillion in August 2026, according to the Treasury, up roughly $17 trillion since the end of 2019. Debt has risen from under 60% of GDP in 2000 to about 125% in 2025, and the Congressional Budget Office projects more than 135% by 2036 (Charles Schwab ). Globally, the IMF's October 2025 Fiscal Monitor warned that public debt is on track to exceed 100% of world GDP by 2029, a level last seen after the Second World War (Bloomberg Government ).


Three mechanisms turn that debt into a weaker currency:

  • Deficits funded by new money. When a central bank buys the government bonds that fund spending, the money supply grows faster than the economy.
  • Fiscal dominance. Once debt is large enough, a central bank can no longer raise rates freely without blowing up the government's interest bill. Monetary policy starts serving the Treasury.
  • Financial repression. Interest rates are held below inflation, so savers earn a negative real return and the debt shrinks quietly in real terms. Historian Russell Napier argues this is the regime investors now face, and that gold may be signalling it (The Meb Faber Show ).

The result is a slow loss of purchasing power. A dollar from January 2020 had lost close to a quarter of its buying power by mid-2026 (BLS CPI ). Over the longer run the effect compounds:

chart
US BLS CPI-U annual averages, 1971 to 2024 · value = 1971 CPI ÷ CPI that year

The debasement trade is simply investors moving into assets that cannot be printed. Gold was its standout winner: the metal roughly tripled from the start of 2023 to its record of about $5,590 an ounce on 28 January 2026. It is not a one-way bet, though. Schwab notes the trade became crowded, and gold fell sharply from its highs through March 2026.

The Three Ds: Three Reasons, One Destination

3 d's of gold

Debasement is only one reason people own gold. MKS PAMP strategist Nicky Shiels frames the market around three Ds, each with a different buyer (HC Insider podcast ):

Table

Debasement is the macro story above: persistent inflation, heavy debt and fiscal dominance. Shiels argues central banks cannot print their way out, so currency devaluation is the likely release valve over time.

Dedollarisation is the geopolitical one. Before 2022, central banks bought roughly 500 tonnes of gold a year; after Russia's reserves were frozen, that pace more than doubled. In the World Gold Council's 2025 survey, 95% of central banks expected global gold reserves to rise over the next year, a record 43% planned to add to their own, and 73% expected the dollar's share of world reserves to be lower in five years (WGC survey ). The dollar's share of global reserves has already fallen from about 70% in 2000 to just over 56%.

Diversification is the portfolio reason. For decades, bonds tended to rise when stocks fell. When inflation is the problem, both can fall together, and gold becomes the alternative shock absorber. World Gold Council analysis shows gold tends to rise with stocks in good times and to turn negatively correlated when they fall hard, which is when a hedge matters most. Yet allocations are still small. Richard Briffod of Gold Token SA cites a 2025 UBS estimate of roughly 2% of investment portfolios, and Shiels puts US institutions below 1%. Part of the reason is history: from the early 1980s to 2000, gold drifted down towards $250 an ounce, and a generation of fund managers learned that it was dead weight. Now that conversations are moving from 3% towards 5% or more, even a modest shift moves a lot of metal.

The three Ds also change how gold is held: central banks want allocated bars in their own vaults, institutions want liquid instruments, and individuals want something they can actually use.

Gold in Your Currency

Franc vs gold

Most gold charts are priced in dollars, but debasement is local. What matters to a saver in London, Paris or Zurich is how gold has done against the money in their own account.

Fiat performance

Long-run figures compare the London gold price at the end of 1970 (about $37.40 an ounce) with the LBMA price at the end of 2025 ($4,368, £3,247, €3,722, CHF 3,465), converted at December 1970 exchange rates. The euro row uses the Deutsche Mark before 1999, converted at the official rate of 1.95583. 2025 returns and year-end prices are from the World Gold Council . Daily prices in each currency are published by the World Gold Council and the LBMA .

The Swiss franc is the telling case. Measured against the dollar, euro and pound, the franc has been one of the strongest currencies of the past five decades. Measured against gold, it has still lost around 95% of its value since 1971. Even the hardest fiat currency is soft next to a metal nobody can print.

Past performance is not a reliable indicator of future results. Gold can fall, sometimes sharply, as it did in early 2026.


The Practical Problem: You Can't Spend a Gold Bar

Gold token

Gold solves the supply problem but creates a usability one. Bars are heavy, need storage and insurance, and can only be traded through a dealer during business hours. That is exactly why the gold standard leaned on paper claims, and why those claims could be diluted.

Two modern answers try to keep the scarcity and fix the usability:

  • Bitcoin takes the sound-money idea and writes it into code. Its supply is capped at 21 million coins, issuance follows a fixed schedule , and it moves around the clock without an intermediary. The trade-off is volatility: its price can swing far more than gold's.
  • Tokenised gold keeps the metal and changes the wrapper. Physical, allocated gold sits in a vault, and a token on a public blockchain records who owns it, so it can be held in a wallet and transferred in seconds.

Compared with the older ways of holding gold, as categories:

Table benchmarking

The three routes differ hugely in size. By Richard Briffod's estimates in his May 2026 Crypto Valley Conference talk, around $10 trillion of gold is held physically (jewellery excluded) and gold ETFs hold about $650 billion, while tokenised gold is a market of roughly $7 billion. It is already the second-largest category of tokenised real-world assets after money market funds, but it is held almost entirely by retail.

Tokens are not all built the same, and two questions matter most: where is the gold stored, and where is the token issued? Jurisdiction is part of the product. In 1933, US Executive Order 6102 forced Americans to hand their gold to the Federal Reserve (Executive Order 6102 ). 

Before holding any token, check who the issuer is, whether the gold is allocated and audited, whether you can verify the specific bars, and what fees apply on entry, exit and delivery.

Tokenised Swiss Gold on SwissBorg: DGLD

Tokenised gold on solana

If you are interested in your own sound money, DGLD is now supported on SwissBorg . 

Issued by Gold Token SA, the tokenisation arm of MKS PAMP, it is described by the issuer as digital evidence of co-ownership of allocated Swiss gold, on-chain.

  • What you hold. Each DGLD token is digital evidence of a co-ownership right in one fine troy ounce of allocated, LBMA Good Delivery PAMP gold, held in segregated, insured vaults in Switzerland.
  • Verifiable bar by bar. Holders can check allocations by wallet address and Asset ID on the Gold Mapper. DGLD held on SwissBorg appears under SwissBorg’s wallet.
  • Physical delivery. Holders of DGLD in self-custody can request delivery from 1 gram, subject to the issuer’s conditions, KYC, AML and sanctions checks, a burning fee and third-party delivery costs quoted beforehand. 
  • Fees. There is no storage or management fee while you hold DGLD. Creation and burning fees apply (initially 0.20% each), as set out in the white paper, and standard SwissBorg app fees apply when you buy or sell.


More From SwissBorg

Sources and Further Reading


This is a crypto-asset marketing communication. Crypto assets are highly volatile. You risk losing all invested capital. Past performance is not a reliable indicator of future results. This article is for informational purposes only and is not financial advice. You can learn more about the risks associated with crypto assets on our List of Risks page .

SwissBorg provides access to DGLD as a crypto-asset service provider. It is not the issuer or offeror of DGLD. DGLD is not a stablecoin and is not pegged to gold. It trades on its own market dynamics and its price may differ from the gold spot price.

The White Paper of the DGLD crypto-asset has been prepared according to Regulation (EU) 2023/1114 (MiCAR) and is published at dgld.ch (https://files.dgld.ch/dgld-white-paper.pdf ).

Offeror: Gold Token SA, Promenade de Saint Antoine 10, 1204 Geneva, Switzerland. dgld.ch, +41 22 818 5273, support@dgld.ch.


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