© Reuters.
Investing.com – Not only did it not leave the international reserve currency, it came back “in victory” as gold reserves of the world’s central banks surged after the global financial crisis of 2008-2009, according to a report by 3 economists from the International Monetary Fund and UC Berkeley , writes MarketWatch.
In the third quarter of 2022, central banks bought more gold than in any other quarter in 55 years.
At the same time, the main buyers were banks from developing countries such as Russia, China, India, Turkey, Argentina, Hungary and Belarus. About 14 of them have increased the share of gold in their reserves by more than 5 percentage points this millennium.
Among the main reasons is the popularity of gold as a traditional store of value, a safe and desirable reserve asset at a time when a number of countries are subject to financial sanctions and when financial investments are potentially subject to asset freezes and confiscations.
What’s most interesting: Russia, Iran and other countries subject to US sanctions can now combine blockchain technology with gold to launch a digital currency that can compete with the dollar. Blockchain will allow you to make transactions with gold without actually redirecting coins or bars.
For example, having a huge amount of gold bars in the vaults of the central bank, replenishing gold reserves annually from the deposits of a mineral-rich country, one can easily sell it to anyone else at the prevailing price, which is currently just over $1,900 per ounce, even if the country’s foreign exchange accounts are blocked. . All it takes is a few trucks or planes and a few guards with guns.
Gold is the only significant asset for which this assumption is true. It is the only currency that is not controlled by any other country and the only one that cannot be counterfeited. It is the only asset that largely guarantees financial privacy.
— MarketWatch materials were used in the preparation
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