Have you ever browsed our online store, come across a coin labeled AOCS Approved and scratched your head wondering what in the world that means?
The American Open Currency Standard—widely known as AOCS—was developed to allow gold, silver and copper to be used in commercial trade and barter.
(Coins that are AOCS Approved should not be confused with the Liberty Dollar, which was discontinued after a lengthy court battle. AOCS is part of a legal bartering system, and does not claim to be legal tender, unlike the ill-fated Liberty Dollar.)
So what does AOCS do?
AOCS has set a common standard for the legion of community currencies cropping up around the United States. The reliable, documented standard allows communities and individuals to create their own medallion designs. Regardless of design, AOCS medallions and rounds can be used to trade for goods and services as long as they conform to the standard.
Besides establishing these standards, AOCS facilitates and encourages the expansion of a Merchant Marketplace, a catalog of businesses that accept AOCS approved gold, silver and copper medallions for goods and services.
The standard also establishes a rate of exchange between AOCS silver, gold or copper and fiat currencies like the U.S. Dollar.
How is AOCS different from other methods of trade?
Past efforts to establish a commodity-backed alternative to fiat currencies have largely failed due to fluctuations in a metal’s value in dollars, Euros, pounds (or whatever currency is used in a particular country).
According to Gresham’s Law, as fiat currencies developed in the last century, traders were (understandably) more likely to spend “bad” money, holding onto the “good.”
In fact, currencies like the U.S. Dollar are not really “money” since they have no intrinsic value. The only reason they do have value is because merchants and individuals accept them as payment for goods and services.
Although gold, silver and copper coins have intrinsic value, the fact that their dollar value can be so unpredictable is precisely the reason most investors find it too risky to use precious metal coins for trading.
Goals of the Standard
AOCS attempts to solve the dilemma of “Gresham’s Law” by establishing a face value for every coin, which stays constant over a long period of time. Face values change periodically based on a 30-day moving average of the particular metal in question.
According to the AOCS website, the standard serves as “a temporary bridge between the world of government-imposed fiat currencies and a free-market system where commodities and other stores of value are actively traded in the Marketplace.”
Ultimately, their goal is to see goods and services priced in grain, grams and ounces alongside paper currency prices.
In August of 2012, Robert J Gray, Executive Director of the American Open Currency Standard went on the record before Ron Paul and the Domestic Monetary Policy subcommittee to speak his mind on complementary currencies, “I suggest to you that if your great-grandparents wouldn’t recognize it as money, don’t accept or spend it”.
When you browse our online store, you’ll find AOCS-approved copper coins (and silver too!) for sale.
We wish the American Open Currency Standard the best of luck moving commerce to a commodity-backed medium of exchange.
Would you participate in a barter system like AOCS?
Let us know in the comments section below or on our Facebook page today!
