Can Bitcoin Be a National Currency? El Salvador Is Trying to Find Out

Your society starts out by putting gold in a vault, because it's cheaper, easier and less vulnerable to robbery if you trade claim checks, as opposed to hauling huge amounts of gold around.

Then once everybody gets used to trading claim checks on the vault, the vault operators and the government realize you can just print new claim checks without them being backed up by actual gold. The exchange rate stays the same because you still have enough gold for the people cashing in and out.

Then they eventually print too many claim checks, and there's a run when everybody tries to cash out. So they let the exchange rate to gold float (historically by debasing gold coinage, but nowadays by leaving the gold standard behind).

Then with no restrictions on printing, eventually they'll make a mistake and print way way too much, the currency just collapses, and everybody starts saying "You know and I know those bills are worthless now and will be even more worthless tomorrow or next week. Gold only please".

It's looking like the world's economy has globalized enough that monetary systems often move in lockstep, and it also looks like we're nearing the end of this cycle. So it's really not surprising that a small, economically troubled country might have got caught in the whirlpool a decade or two ahead of the bigger players and be moving back to hard money.