There are early signs that parts of the world, led by BRICS countries, are returning towards a gold standard for international trade.
As the world races towards a new gold standard has a variety of central banks around the world taking part in various experiments with new forms of international trade.
mBridge – Gold Backed Central Bank Digital Currency (CBDC)
As a result of the sanctions against Russia, many foreign counties and central banks are looking for alternatives to trading in the US dollar.
Saudi Arabia has now joined the mBridge program as a full member, a de-dollarized trading system developed by the Bank of International Settlements (BIS) and China that uses a gold-backed CBDC for international trade.
The mBridge project began in 2021 as an international collaboration between the BIS, The People’s Bank of China, the Bank of Thailand, Central Bank of United Arab Emirates and the Hong Kong Monetary Authority.
Many of countries have joined the mBridge project as observers, while some, like Saudi Arabia, have joined on as full members.
BRICS was established as an international trade group comprised of Brazil, Russia, India, China and South Africa. Recently, Saudi Arabia announced that they were also considering BRICS membership.
Tether Launches Gold-Backed US Dollar Stablecoin
Gold-backed stablecoins represent a fusion of traditional asset stability and modern digital currency flexibility by providing a stable, secure, and transparent way to tokenize gold through blockchain technology.
The recently launched Alloy by Tether product is a dollar-based stablecoin backed by tokenized physical gold bars. Tether Gold (XAUT) represents ownership in one troy ounce of gold on a specific gold bar that is stored in Swiss vaults. Token holders can access the details of the gold bars they own through the app.
BRICS & the Petroyuan vs the Petrodollar
In 1974, the United States and Saudi Arabia reached an agreement that established the framework for the petrodollar system, whereby Saudi Arabia would sell oil exclusively in U.S. dollars.
Led by Henry Kissinger and William Simon, the agreement cemented the U.S. dollar’s status as the global reserve currency by ensuring that oil was sold exclusively in dollars.
The end of the petrodollar agreement occurred when India began trading oil for yuan with China, essentially creating the petroyuan as a new global currency for oil trade.
The global demand for US Dollars has already begun to shrink as Gulf nations are now accepting the yuan for oil. Saudi Arabia’s early participation in the mBridge program signifies that they oil rich country is considering trading oil in other currencies that are traded within the CBDC system.
Why are Countries Losing Faith in the Dollar?
Ever since the Hunt Brothers cornered the silver market during the 1980s and were convicted of price manipulation, there has been an ongoing suspicions that the major Wall Street Banks have been involved in the same activities.
In the US there have been criminal convictions of numerous of traders from JP Morgan Chases, Deustche Bank, UBS, Scotia Bank and others in recent years. One of those convicted was a even seated on the LBMA Board of Directors.
Part of the sanctions leveled against Russia after the war in Ukraine broke out in 2022 was expulsion of Russian mined and refined gold from the LBMA and western markets. In response, Russia established the Moscow World Standard, an alternative trading market for precious metals outside of Western Banking Institutions.
Project mBridge Observers
Asian Infrastructure Investment Bank, Bangko Sentral ng Pilipinas; Bank Indonesia; Bank of France; Bank of Israel; Bank of Italy; Bank of Korea; Bank of Namibia; Central Bank of Bahrain; Central Bank of Chile; Central Bank of Egypt; Central Bank of Jordan; Central Bank of Malaysia; Central Bank of Nepal; Central Bank of Norway; Central Bank of the Republic of Türkiye; European Central Bank; International Monetary Fund; Magyar Nemzeti Bank; National Bank of Cambodia; National Bank of Georgia; National Bank of Kazakhstan; New York Innovation Centre, Federal Reserve Bank of New York; Reserve Bank of Australia; South African Reserve Bank; and World Bank
