The former European minister believes that large purchases of gold by Russia and China may be the first step towards the launch of a joint cryptocurrency .
Last year, Russia became the largest buyer of gold, and over the past 10 years, the volume of this precious metal in the reserves of the country increased four times.
The volume of purchased gold began to grow sharply after the introduction of Western sanctions in 2014. China pursues the same policy with regard to its reserves, actively buying precious metals.
Former European Minister for Portugal Bruno Masas believes that this may be the initial stage of creating a digital currency backed by gold. He says:
“These purchases occur at a time when experiments are being actively conducted using valuable metals to build cryptocurrencies. Theoretically, the combination of the two assets will combine the stability of gold with the convenience and security of digital currencies.
Masas believes that this approach can provide countries with a new calculation tool that excludes the US dollar.
The currency that China and the Russian Federation are supposed to create will differ from existing cryptocurrencies. It can become a settlement method that will work as a technology of international bank transfers between legal entities.
Despite the relative price stability, gold has several disadvantages: it is expensive to transport, transfer and store in proper conditions. In this regard, the cryptocurrency is much more convenient.
Currencies built on blockchain technology can only be safe when based on a large number of nodes around the world. With full centralization, they are just as vulnerable as any other computer system.
Earlier, Russian government economist Vladislav Ginko expressed doubts that the country could create cryptocurrency linked to gold. Referring to the experience of Venezuela, which proves the unreliability of precious metals as an asset, the economist noted:
“Gold is being traded for US dollars and the ability to sell it can also be limited by sanctions from the United States. This can be seen in the example of Venezuela, which cannot sell its reserves locked in the Bank of England. ”
In addition, the reason for the growth of purchases may be the desire to support the producers of the precious metal. In 2018, only 5.4% of all Russian mining went for export, most of the volume was purchased by the Central Bank.
Publication date 04/23/2019
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