In a world of spiralling government deficits, stubbornly high inflation, bank failures, fractured politics and gruesome wars wreaking economic as well as humanitarian havoc, it is little surprise that investors of all types have been seeking refuge in gold.

The gold price has risen 19% in the last year and 75% in the last five years to an all-time dollar high of over $2,400 per ounce. Whether this is nation states seeking a safe haven away from an uncertain dollar, or individuals who have learned that bank deposits are only safe up to a government guarantee level, the appeal of the metal as a store of value established for thousands of years has its own particular appeal.

While the series of bank failures and then the global rise of inflation have led earlier rallies, it is the soaring government deficits, in particular in the US, that are promoting talk of broader threats to the government bond markets and hence the dollar.

The question for investors looking to increase their weightings in gold is whether technology offers better ways to do so than the traditional approach of buying bullion and keeping it in a vault, or indirect ownership via ETFs. Have the advancements in digital currencies anything to teach the commodities markets? Or indeed can some of the difficulties faced by digital currencies be addressed by technology-led ways of investing in gold?

Digital currencies have promoted themselves as providing a modern alternative to fiat currencies and the ways in which they can be accessed has broadened, whether through systems such as Coinbase or, for Bitcoin, now through mainstream ETFs offered by Blackrock and Fidelity. It is this institutionalisation that has helped prices recover from the troughs after the collapse of FTX. However there are two overarching considerations for those considering diversifying into digital currencies. One is the high volatility of their prices, shown in stark terms through the FTX saga that exposed the fragility of their nascent infrastructure, and the other is that they are not currencies in the sense of being able to monetise them and spend them in a shop.

Gold  and silver have provided a more stable alternative and have been used as currency, whether directly as coinage or underpinning the gold standard for major currencies, for millennia until the end of the  Bretton Woods system in 1971. While having price fluctuations they are far more stable than digital currencies to date. More importantly they have seen a long term outperformance of mainstream currencies in real terms. The US dollar has lost 83% of its value in real terms since 1970, while gold has appreciated 880% in real terms.

However traditional approaches to gold ownership have drawbacks. Physical bullion needs to be stored, insured and the spreads for a retail investor buying and selling can be wide (perhaps 5% or more). ETFs have proved a popular alternative, both for individual and institutional investors. Management and custody costs are often low (c.40b.p.) and they can be bought and sold on the spreads and commissions typical for any share. The largest (the World Gold Council SPDR) represents over $50bn of underlying gold. However an investor does not own the gold directly and it is still an investment security rather than an actual currency.

One step has been to make the ownership of gold more accessible via e-commerce. Platforms such as Bullion By Post offer retail investors access to a broad range of coins and bar sizes online. However this still leaves the issue of personal storage and insurance and spreads can be quite wide.

A further step has been taken by BullionVault, which deals only in the bar sizes in the wholesale market and stores and insures gold on behalf of retail investors. This allows trading at wholesale market spreads and next day settlement or, if desired, physical delivery. However, while it allows direct ownership at tight spreads it does not allow gold to be used as currency.

However a company called Glint has developed a digital alternative to owning physical gold that allows it to be treated as a currency in its own right. Investors own physical gold directly, which is stored and insured on their behalf in a Swiss vault. They can buy and sell their gold via an app at spreads equivalent to an ETF or the wholesale markets, but crucially they can also enjoy maximum liquidity by being able to use it as currency in any shop. Investors can use their Glint Mastercard to make purchases which will then deduct the equivalent amount of gold from their account. Unlike a traditional bank account the underlying gold is not subject to failure risk – it is owned directly by the investor in a client account and is immune to credit risk, unlike cash in a bank.

This digitisation of gold has a range of appeals to different audiences. To a traditional gold investor it is a way to cut spreads and costs while still enjoying direct ownership. To a customer looking to reduce the risks around their deposits it is like a normal currency account but protected from the risks of bank failures while still as flexible as a cash account. And to a crypto investor it is equivalent to a gold stablecoin but useable as cash.

It will be interesting to see if Glint is at the vanguard of a reinvention of commodities as global currencies for the digital age. One intriguing development is happening in the US, where, against the backdrop of growing federal deficits, 20 states are at varying stages of enacting the right in the US Constitution for gold to be used as legal tender. Glint is working with these states to provide the backbone to enable this to be translated as a practical fractional reality. That is something that could be the most significant change in the currency infrastructure in over 50 years.

Disclosure: Corniche Growth Advisors is advising Glint on their Series A capital raise