Parallel currencies, in practice, are actually very common today. But for some reason, the idea of them are not very well-formed in people’s minds. Bitcoin is an example of a parallel or alternative currency. Parallel meaning that you have the option of using one or two, or multiple currencies at the same time.
The dollar still exists, but, for certain transactions, you use bitcoin. In fact, this is the normal state of affairs in most places in the world today. If you live in Vietnam, some do business in Vietnamese dong, this junky local fiat currency, or you do business in dollars or euros. So you have, at any time, very commonly, from the smallest street to the largest corporations to the government itself, they are all doing business in dong, dollars and euros, in large scale, simultaneously.
What if you took those three options and added one more? What if you added a gold-based currency? You could do business in fiat dong, fiat euros, fiat dollars, or whatever you might call this gold-based currency, say ‘golden bucks’.
You could create this alternative gold-based currency domestically, in perhaps some private institution in Vietnam. The government itself could issue it. The government would have its fiat dong, and the government, or some central bank like institution, would actually have a Vietnamese, state-sanctioned, gold-based currency.
It could be a government-produced currency from another country, let’s say China. The Chinese government itself sets up a second central bank, The People’s Gold Bank of China, sets up a separate Chinese currency so there’s two; the existing fiat yuan, which is really dollar-linked, and a gold-linked, golden yuan.
And you could use this in Vietnam! Why not? Using the dollar and euro, why not the Chinese gold alternative, and the local Vietnamese dong junk currency?
So, this creates the option to transition smoothly to this gold-based parallel currency, without have the data transition where it’s all 100% one thing and 100% another thing. you can just put your toe in the water and if you like it, that’s great, and if you don’t, you do something else and it makes everything very simple.