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How would you handle the market that emerges between the two currencies? If Gresham Money is deemed less valuable, and some market exists between the two currencies, it seems that GD would just weaken relative to USD. I'm not sure how you could stop merchants from then just inflating GD prices, neutralizing the viral effect.

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I fully expect (and hope for) such a market to emerge.

One key thing, which I mentioned in another comment, is that GD "matures" into USD after a certain period of time (e.g. 30 days). But some people might not want to wait for their GD to mature, so they'd be willing to sell their GD at a discount of face value. But the price gets too low, people will prefer more to keep their GD.

Our merchant partners are required to set prices equally in both USD and GD, but there's nothing preventing other users from dealing in USD/GD in this way. And by participating in this market ourselves, we can help build our USD reserves.

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