mBridge and Alloy by Tether Bring Tokenized Physical Gold to Digital Currencies
Various developments in emerging finance are implementing gold-back digital currencies and tokens.
CBDC
Gold Replacing the Dollar as Reserve Currency for BRICS Members
Central banks across the Global South have been actively bolstering their gold reserves in anticipation of this transition. China, a major player in this shift, has been consistently purchasing gold for 18 consecutive months, with a staggering $53.3 billion worth of U.S. Treasuries being sold off since the beginning of the year.
House of Representatives Passes Bill to Block CBDC
The House of Representatives voted to pass the CBDC Anti-Surveillance State Act by a margin of 216 to 192, with 213 Republicans voting in favor. Three Democrats voted for the bill, while 192 Democrats opposed it.
HSBC Launches Gold Token, Chinese Investors Turning to Gold Beans, SWIFT Planning CBDC Rollout
HSBC has launched a blockchain-based digital gold token for retail investors in Hong Kong that is backed by physical gold held in the bank’s London vault allowing for efficient and cost-effective tracking of allocated and unallocated gold holdings.
Young investors in China have started a trend towards accumulating tangible wealth by stacking 1 gram gold beans. The beans are affordable and are viewed as a low-risk investment options.
Silver buyers reporting issues with sales tax and order cancellations with Walmart
As the popularity of buying precious metals online grows, many buyers have experienced issues with being charged sales tax in states where metals aren’t taxed. Some buyers turn to social media for advice on how to deal with customer service when resolving sales tax issues.
Sales tax on precious metals is contentious issue, which is a complicated patchwork of outdated state laws that have created issues that online retailers must contend with since South Dakota v. Wayfair decision in 2018.
Zimbabwe Takes Steps to Move Towards a Gold Standard
Currently, the Zimbabwe gold-backed digital currency that was introduced in 2023, is in use as legal tender and a store of value alongside the Zimbabwean dollar and bond notes. According to state-owned media reports, the country’s central bank currently holds roughly 793kgs of gold in reserves valued at roughly $49 million at the current price with plans to grow reserves to around $100m.
What is Fiat Money?
Unlike commodity money like gold or silver, which have intrinsic value, fiat money has no inherent value. Its value is solely based on the trust and confidence that people have in the issuing government. If that trust wanes, the value of fiat currency can be at risk and individuals and everyday workers will continue to see the purchasing power of the dollar diminish over the years. It can impact the ability to save for the future and plan for retirement.
SEC Tightens Crackdowns on Crypto Exchanges as Federal Reserve Forces Banks to Adopt FedNow CBDC
The Securities and Exchange Commission launched another attack on crypto exchanges Coinbase and Binance this week, a move that had been expected. Given the overlap with the timeline of the Federal Reserve forcing banks across the country to implement FedNow as part of the backbone of an ongoing effort to implement a central bank digital currency.
Florida and Indiana Ban Use of CBDC
Both Florida and Indiana have recently passed laws banning the use of a central bank digital currency (CBDC) as money in those states.
These laws explicitly exclude a CBDC from the definition of money in Florida and Indiana, effectively banning its use as such in these states.
Texas Committee Passes Bill To Create 100% Gold And Silver-Backed Transactional Currencies
Legislators in Texas are leading the charge against the Federal Reserve’s monopoly on fiat money by offering an option for people to conduct business in sound money.
Physical gold and silver that would support the backing of the digital currency would be stored in a pooled account at the Texas State Bullion Depository.