Posts

Will the gold standard return thanks to blockchain-based centralized digital currencies?

avatar of @nirvana3003
25
@nirvana3003
·
·
0 views
·
3 min read

Fifty years after the decoupling of the U.S. dollar from gold and its subsequent adoption as a fiat currency, many people believe that this type of monetary model is coming to an end. The fact is that people no longer have much confidence in the ability of U.S. institutions to generate wealth for the majority of the population.

The United States is not the same country that emerged as the main political, military and economic superpower of the planet after the Second World War, so to expect such an anachronistic and unethical monetary model as Fiat to continue manipulating the economic and financial destinies of the planet through the dollar could be considered naïve.

Likewise, the emergence of Blockchain technology and decentralized cryptocurrencies with Bitcoin (BTC) at the forefront, poses new monetary and financial methods beyond what the old style based on the printing and digitization of paper money has to offer. Cryptocurrencies are the enemy to be defeated by the central powers, they know well that their antiquated fiduciary method is crumbling like a sand castle on the beach before the power of bitcoin and blockchain technology, so moving this aspect of cryptocurrencies to the fiduciary world becomes necessary to sustain the power and control of the people.

At the recent Davos World Forum the strategy, or rather the order, seems clear: the world requires a general reset, a clean slate. Perhaps this implies the general cancellation of debts in order to assume a new international financial and monetary scheme away from the US dollar but centralized in a currency manipulated by a single power, such as the International Monetary Fund (IMF).

On other occasions the IMF has expressed its rejection of cryptocurrencies, however the idea of using blockchain technology within the new international financial regime does not bother them, on the contrary, they consider it as a possible way for the economic architecture of the future. This is where we ask ourselves: will they maintain a system based on the continuous issuance of money without any backing?

China is already experimenting with a blockchain-based digital currency called e-Yuan/Renminbi, which they intend to formally establish as their means of payment starting next year. A situation looms around this new centralized digital cryptocurrency as to whether it will maintain its path untethered from any backing or follow a scheme based on the value of gold.

In recent years China has become the largest buyer of gold in the world, although they do not disclose official figures it is believed that the reserves of the precious metal of the Asian giant are four times the government's version. So, this could mean that China intends to reconfigure the international monetary system by returning to a digital and blockchain version of the gold standard?

For now the Chinese government neither confirms nor denies suspicions about its e-yuan/renminbi and a possible gold backing, but it should be noted that in the face of the evident collapse of the fiat model even the US Federal Reserve is considering generating a blockchain-based digital currency to compete with China's. A digital dollar acting as a cryptocurrency will pose huge changes in the economic life of the country and the world, but considering Blockchain technology to maintain the same functioning as the dying fiat does not seem a smart move to maintain global supremacy.

Unlike the United States, China is a fully digitized society in its monetary scheme, so taking on this new monetary regime will not be difficult for it to implement. The IMF also plans to establish an international currency backed by the Fiat reserves of the world's major economies. Apparently there is no turning back, there is a conviction among the powerful who pull the strings of the world to rebuild a centralized financial system that will face the Bitcoin and cfiptomonedas with its main weapon: the blockchain technology.

Posted Using LeoFinance Beta