This is an example of how a gold-backed digital currency would work. A detailed design is at

Depository: stores gold deposits.
Inventory System: manages gold deposits
Currency: manages cash transactions
Blockchain: equivalent to accounting ledger
Key Manager: equivalent to safety deposit box keys
Client: Customer with gold in depository

Assumptions: The depository has an inventory management system which synchronizes with the blockchain.

Here's a simple use case of transferring money:

  1. Client sends a transaction to Currency API

Example message:

  1. Currency forwards message to Key Manager.
  2. Key Manager verifies the payer, payee and payer's balance.
  3. Currency creates blockchain entry.
  4. Currency sends result to client.