Another Nation Seeking a Hard Currency and Undermining the Dollar and IMF System!
With Bitcoin’s rally pushing towards $9,000 for the first time in almost a year, the potential of cryptocurrencies is still widely overlooked and the implications of money 2.0 could change the entire financial and geopolitical structure as we know it!
It’s been revealed that the Bank of Russia will be considering a PROPOSAL to introduce a gold-backed cryptocurrency, enabling flexibility outside the dollar-based economic system and boost prosperity in the Eurasian Economic Union. If such an event happens, the ramifications on the geopolitical arena could trigger a chain of events (more on that later).
While speaking to key figureheads in the Duma (Russian parliament, an elected semi-representative body), Russian Central Bank Governor Elvira Nabiullina stated that use cases and the benefits of a theoretical gold-backed digital asset are being reviewed.
_“As for mutual settlements: we’ll consider your proposal on what cryptocurrency is tied to gold. But in my opinion, it’s more important to develop settlements in the national currency” – _Nabiullina (translated from Russian)
Also being considered is the prospect of a cryptocurrency pegged to the Russian ruble, otherwise known as a stablecoin, to streamline payment settling for the Russian Central Bank.
Perfect Storm of Geopolitical Uncertainty: Iran Also Looking at a State-Controlled Cryptocurrency
It’s not just Russia that’s looking at alternative solutions outside of the traditional global system. Earlier this year, we reported on Iran’s Central Bank considering the rollout of its own digital asset as a way to get around sanctions and frozen payment channels.
Iran is a close ally of Russia and China and a regional power in its own right. The economic block known as BRICS and its allies are actively trying to unhinge from the U.S. dollar. Is reintroducing a gold-backed system alongside emerging technologies a viable plan?
Source: https://en.wikipedia.org/wiki/BRICS
The benefits of blockchain tech and digital assets are beginning to be recognized. For a government to suggest national cryptocurrencies with a gold standard, a clear use case is likely being identified and explored. Interestingly, Ethereum founder Vitalik Buterin discussed economic opportunities that Ethereum and the blockchain could bring with President Putin.
Is This Why Russia and China are Accumulating More Gold Than Ever Before?
China and Russia are the two leading members of the BRICS group and are accumulating precious metals at an alarming rate while evaluating the economic benefits of blockchain technology.
Russia and China Gold reserves and purchases.
Sources: https://moneyweek.com/499249/how-much-gold-does-china-have-a-lot-more-than-you-think/, https://www.ainsliebullion.com.au/gold-silver-bullion-news/russian-to-buy-gold-e2-80-a6/tabid/88/a/812/default.aspx
Central banks across the globe are also doing the same, but is this done for the general population’s benefit?
It’s unlikely, but the reality is that the thirst for gold and silver subtlety highlights a lack of confidence in the current financial system, which just so happens to be led by the U.S. dollar.
Source: http://www.shotguneconomics.com/2017/10/russia-and-china-not-only-central-banks.html
A gold-backed currency outside of Western intervention could create a financially independent nation that can compete with financial dictatorship. The underlying motivation of accumulating gold confirms the desire and urgency to weather out an oncoming economic storm…
Economic sanctions and oil price wars have financially hurt Iran and Russia (the Russian financial crisis in 2014 and Iran’s currency crisis), and both have endured currency devaluations in recent years.
The Ramifications of Countries Opting Out of the U.S. Dollar System: Wars Over Cryptocurrencies?
Nations that sidestep and move away from the U.S. dollar’s economic machine tend to be punished militarily or economically, and if the influence of cryptocurrencies merges with or rivals that of national currencies, digital assets could have a heavy impact on geopolitical decisions as the century unfolds.
Preluding the second Gulf War, Iraq shifted its oil exports from the U.S. dollar to the euro, resulting in its resources being stripped and its society being damaged for generations to come.
Source: https://www.theguardian.com/business/2003/feb/16/iraq.theeuro
Although no angel himself, Colonel Gaddafi proposed a gold-backed African currency. Libya is now a warzone. A gold-backed African currency would have severely undermined the dominance of the USD, EUR, and GBP, which are backed by nothing.
The trend shows that Russia and Iran’s attempts at creating their own independent monetary system could escalate tensions and severely undermine the dollar’s role as a reserve currency.
Future regional conflicts could be triggered over technology and sovereign governments introducing their own economic systems, creating independence from the U.S.A. and the IMF.
In an attempt to retain a power base, new economic systems and resources could be fought over and destabilized or taken over just as easily as oil, gold, and other resources have always been highly contested.
The fallout of Russia implementing a gold-backed cryptocurrency or stablecoin pegged to Russian currency could define the century more than we originally realize. Empires throughout history have often gone to war to retain power, plunder resources, or due to overconfidence (Hitler turning on the Soviets). The 21st century doesn’t seem to be any different.
This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.