The problem is that NPC don’t spend the money you give them.

After a while, the NPC will hoard all the wealth and players will be left with nothing.

If there is a way for NPC to spend the money, you will have a circular economy.

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Discussion

what would npcs buy

Daily supplies. To live.

I want to say they can buy things players collect.

But usually in games items are sold at a huge discount, giving a huge advantage to the npcs.

So this needs to be tight. NPC can’t sell things they didn’t pay for to begin with.

But honestly at this point, the game is not fun 😅 there is no need to implement real economics in a game you the objective of it is to have fun.

Honestly they could just make gold spent at NPCs available for drops in the game again. Still can imagine problems, since NPCs don't adjust prices based on the scarcity of the currency.