Once gold was used to trade goods and services. Now people use fiat currency to buy and sell products. Maybe sometimes you think whether it is possible to go back to the gold standard when the store of value will not be diluted.
One of the largest Russia's Bank Seber which is known as Sberbank before, issues gold-backed digital financial assets (DFAs). It is assumed that gold-backed digital financial assets (DFAs) will be a great alternative to investment. Since it's backed by gold and issued by Bank, people will trust it and it can be an initiative for de-dollarization.
After the Ukraine invasion, a lot of things changed and due to the financial sanctions, Russia is working hard to find alternatives so that they can keep doing everything as they did before.
When you think about gold-backed digital financial assets (DFAs) and de-dollarization, it reminds you of something that happened in the past. The dollar was backed by gold at that time. You were able to submit your dollar to the bank and claim the gold.
More dollars were printed, so the authority could not deliver what they claimed. Then 1971 happened and the dollar is not backed by gold anymore. That's how you get the fiat currency that we use today.
Russia is working on using cryptocurrency to make international trade settlements. According to Russia’s Congressional finance committee chairman, Anatoly Aksakov, they are going to legalize cryptocurrency for international trade in January 2023. But they do not like to use crypto in their country to make any trade.
Other countries pay attention to this and they also try to find alternatives to reduce the reliance on foreign currency. It is good to reduce exposure and diversify. At the same time, the way everything works in the existing financial system, you cannot get out of it instantly.
When Bitcoin is there, who needs to hold gold-backed digital financial assets (DFAs)? You don't need to trust any third party when you have Bitcoin. And the most fascinating thing is, no matter which part of the world you live in, you can hold crypto and build your assets outside of the existing financial system.
This is a blessing that we all have now. We have blockchain technology that is changing the world. If you want to ensure financial stability and growth, you can think about cryptocurrency seriously.
So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
Reference: 1
70.781 SRY