Annihilation of the US dollar? Russia considers gold-backed cryptocurrency

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MOSCOW – A new proposal is being studied by Russia to create a gold-backed cryptocurrency that could be used in cross-border operations with other countries.

The bold idea, which is being considered by the Russian Central Bank (CBR), was presented by Vladimir Gutenev, deputy of the State Duma (lower house of the Russian parliament).

The deputy suggested the beginning of the debate to create a decentralized national exchange, denominated in gold.

“Regarding bilateral operations, we will, of course, consider the proposal on a cryptocurrency linked to gold. But, in my opinion, it is more important to develop operations in national currencies,” said Elvira Nabiullina, head of the Central Bank, commenting on the new proposal.

Unlike ordinary virtual currencies, which are unsecured because they are not supported by anything, gold-backed cryptocurencies have their value tied to a real asset, the deputy explains.

For Gutenev, the new currency would combine the quality of digital currency with the fact that it is a stable currency, that is, having a stable value.

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“At first, [the Russian Central Bank] is opposed to the introduction of coins encrypted in our monetary system. We see no possibility that the coins encrypted, in fact, fulfill the function of monetary surrogates,” Nabiullina said.

However, the chairman of the Russian banking entity notes that the regulator could study the possibility of creating stable currencies that have a real asset behind.

Rising gold reserves, in order to diversify the country’s international reserves and reduce dependence on the US dollar, have been part of Russia’s national policy, whose precious metal reserves and currencies will soon reach $500 billion – enough volume to deal with crisis episodes.

In May, the World Gold Council (WGC) reported that Moscow led among the world’s largest buyers of gold in the first quarter of this year.

The council report pointed out that Russia added 55.3 tonnes to its coffers, bringing its vast gold reserves to 2,168.3 tonnes.

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