{"id":14216,"date":"2022-10-31T03:13:05","date_gmt":"2022-10-31T03:13:05","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/economists-discuss-russia-china-potentially-developing-gold-backed-currency-that-could-undermine-us-dollar-economics-bitcoin-news\/"},"modified":"2022-10-31T03:13:05","modified_gmt":"2022-10-31T03:13:05","slug":"economists-discuss-russia-china-potentially-developing-gold-backed-currency-that-could-undermine-us-dollar-economics-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/economists-discuss-russia-china-potentially-developing-gold-backed-currency-that-could-undermine-us-dollar-economics-bitcoin-news\/","title":{"rendered":"Economists Discuss Russia, China Potentially Developing Gold-Backed Currency That Could Undermine US Dollar \u2013 Economics Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Economists have weighed in on reports that China and Russia may be developing a new gold-backed currency that could undermine the U.S. dollar\u2019s status as the world\u2019s primary reserve currency.<\/strong><\/p>\n

Russia and China May Be Developing Gold-Backed Currency<\/h2>\n

Several experts have shared their views on Russia and China potentially creating a new gold-baked currency, Fox Business reported Saturday, emphasizing that China has been buying up huge quantities of gold while Russia was forced off the U.S. dollar due to sanctions imposed on the country following its invasion of Ukraine.<\/p>\n

The news outlet noted that some experts have cautioned that these moves, along with the closer relationship that has developed between Moscow and Beijing, point to the likelihood of China attempting to launch a gold-backed currency. However, neither Russia nor China has officially confirmed plans for such a currency.<\/p>\n

Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. diplomat, explained that Chinese leaders have talked about reforming the global financial system and reducing the U.S. dollar\u2019s dominance for two decades.<\/p>\n

\u201cTwo components in that strategy center around the development of a yuan-based global commodities trading system and efforts by China, in partnership with Russia and other like-minded countries, to challenge dollar dominance by creating a new reserve currency,\u201d he told Fox News Digital, elaborating:<\/p>\n

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In essence, Beijing and Moscow are seeking to build their own sphere of influence and a unit of currency within that sphere, in effect inoculating themselves from the threat of U.S. sanctions.<\/p>\n<\/blockquote>\n

Swiss exports of gold to China in July rose to their highest level since December 2016. According to Swiss customs data, Switzerland shipped 80.1 tonnes of gold worth 4.4 billion Swiss francs ($4.4 billion) to mainland China during the month.<\/p>\n

A research fellow and economist at the Heritage Foundation\u2019s Asian Studies Center, Min-Hua Chiang, believes that the appeal for the new Russia-China currency \u201cwill be limited\u201d due to small trade volume, stating:<\/p>\n

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Even if both countries use a new currency for bilateral trade transactions, the relatively small trade volume will limit the impact on the U.S. dollar.<\/p>\n<\/blockquote>\n

Data from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a global financial messaging firm, showed that 42.6% of global payments in August were in U.S. dollars, 34% were in euros, and 2.3% were in Chinese yuan.<\/p>\n

The Heritage Foundation economist stressed that the yuan \u201cis still leagues behind the USD and euro,\u201d adding that a multinational currency, like the euro, requires \u201ca level of political and economic coordination and integration that is not present in Asia today.\u201d She opined:<\/p>\n

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The USD remains the safest, most convenient and most widely used currency in Asia and in the world today. No other currency (backed by gold or otherwise) is comparable, and that is unlikely to change in the near future.<\/p>\n<\/blockquote>\n

During the BRICS Summit in July, Russian President Vladimir Putin announced that the BRICS economies plan to issue a \u201cnew global reserve currency<\/a>.\u201d The BRICS nations are Russia, China, India, Brazil, and South Africa. Analysts believe the BRICS move to create a reserve currency is an attempt to undermine the U.S. dollar and the International Monetary Fund (IMF)\u2019s Special Drawing Rights (SDRs).<\/p>\n

Do you think Russia and China are developing a gold-backed currency that could undermine the U.S. dollar\u2019s status as the world\u2019s reserve currency? Let us know in the comments section below.<\/strong><\/em><\/p>\n

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\nKevin Helms <\/h6>\n

\nA student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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