If a currency has a backing, the value remains more consistent and stable. Take TSChips (Triple Star Currency). If TSChips are backed by gold in my vault or through partnership will a gold producer or investor, then TSChips will let investors and users have more confidence.
It will also feel, or better yet, act as insurance to cover lending or backing in the event of catastrophic event. Much like FDIC. Your TSChips are insured by the gold in my vault if the TSChips Exchange goes down.
Overall I feel its for confidence. The problem right now is how easy it is to create a gold backed currency or lending. There is not a standard nor and oversight ensuring the unscrupulous aren't involved.
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