[zarzavat]

There is a spectrum between everything going smoothly and complete government collapse. Most people worry about a Turkey or Argentina where the currency loses most of its value but the government still functions.

Even in failed states gold maintains value. For example in Somalia’s recent past, not only was gold still fully exchangeable but the existing Somali currency continued to work with counterfeit currency filling the vacuum.

What stops gold exchange is not non-existent government but any particularly strong and draconian government that decides that alternative forms of money are a risk to the regime (e.g. North Korea).