Inflation is definitely one of the issues that keeps the modern CEO up at night. It’s an inescapable economic reality driven by far-flung and unpredictable forces that has the power to squeeze profit margins, increase borrowing costs, and chill consumer activity. If there were one problem most business leaders would love to solve, it would be inflation.
But fixing inflation is a challenge that is beyond even the largest companies. And the US government, at least in recent years, also seems to be unable to tame it to a degree that will allow business leaders to rest easy. It’s gotten to the point where policymakers are uncertain about how to move forward, prompting US Federal Reserve Chairman Jerome Powell to announce in September 2025 that “There are no risk-free paths now” when it comes to controlling inflation.
Yet those who are willing to look at economics from a fresh perspective are discovering that a future in which inflation is not an ever-looming threat to business success is definitely possible. In fact, the solution to the persistent inflation now troubling the business world could potentially emerge in the form of innovative digital currencies.
Finding an anti-inflationary alternative to traditional currencies
Those looking for investments that provide a hedge against inflation have many to choose from. Real estate is one example of an asset that traditionally increases in value as inflation climbs. Commodities are another that can serve as an inflation hedge. Treasury Inflation-Protected Securities are specifically designed to protect investors against inflation.
Inflationary hedges enable investors to mitigate losses driven by persistent inflation, but they don’t provide companies with a practical means for doing business. Companies need currency to engage in the consumer landscape, which means they’ve traditionally been forced to put up with the problems fueled by inflation. With digital currencies, however, innovations are possible that give companies and the consumers they serve the best of both worlds.
Leveraging tokenization in the fight against inflation
Blockchain is the revolutionary technology that empowers decentralized currencies like Bitcoin. It allows for digital currencies to be spent securely, doing away with the need for a central bank or other intermediaries.
But decentralized finance is not the only innovation blockchain has brought to the economic landscape. The secure platform it provides facilitates the digitalization of real-world assets such as real estate and commodities. Tokenization, as the digitization process is often called, streamlines the exchange of real-world assets. And recent reports show that tokenization is taking off.
For the business world, one of the most significant benefits of tokenization is its ability to create digital currencies that aren’t impacted by increasing inflation. Among the most promising applications is the digitization of gold.
Turning to gold as a hedge against inflation
Gold is a primary inflationary hedge used by investors. Historically, it has been the asset investors flock to when inflation and uncertainty mark the economic landscape. During the period of high inflation in the 1970s, for example, gold values surged to record highs as investors in search of a safe haven increased their gold holdings.
Scarcity is the key factor contributing to gold’s anti-inflationary properties. The US dollar and other paper currencies can be printed in unlimited supplies, so inflation generally rises as the amount of money in circulation increases.
With gold, however, the supply is essentially finite. New gold can be mined and added to the supply, but the process of converting it from a metal ore to a tradable asset is much more difficult than simply printing money. Consequently, the value of gold is preserved, if not increased, when the printing of paper currency leads to inflation.
Conducting everyday transactions with digitized gold
As mentioned above, blockchain technology provides the capability to tokenize real-world assets, making them easier to own and exchange. When applied to gold, tokenization facilitates the creation of an anti-inflationary digital currency that combines the lasting value of physical gold with the ease, speed, and security of digital assets.
While well-known digital currencies like Bitcoin have provided investors with massive returns in recent years, they also subject those investors to extremely high levels of volatility. The massive price swings Bitcoin and other cryptocurrencies experience limit their usefulness as a regular means of economic exchange.
Gold, on the other hand, doesn’t suffer from the same type of volatility, which positions it as a practical asset for tokenization and regular spending. Platforms already in place allow users to spend digitized gold in virtually the same way they spend the dollars held in their checking accounts. Records of physical gold are created on blockchain, and records of exchange are logged in ways that provide security and transparency.
By making it easier to spend gold, tokenization also opens the doors for the average consumer to focus their savings and investments on an anti-inflationary asset. Inflation devalues the dollar, robbing consumers of buying power. Those holding gold, however, see the value of their asset increase along with inflation, as the price of gold generally rises with inflation.
Tokenized gold provides the reliability needed to push digital assets into the mainstream
The original vision for digital currencies such as Bitcoin was for them to leverage their fixed supply and decentralization to provide an anti-inflationary means of exchange. But the volatility of crypto markets has discouraged mainstream adoption.
Tokenized gold, however, addresses the problems that have made consumers wary of crypto. It provides a secure asset that is easy to exchange, easy to trust, and insulated from the adverse effects of inflation.
Written by Jai Bifulco.
