Daily Gold Market Report

Digital Currency Disruption
How Crypto Stablecoins Threaten U.S. Financial Supremacy

(USAGOLD – 11/27/2023) Gold prices continue to climb higher with no major geopolitical developments over the long U.S. Thanksgiving holiday weekend. Gold is trading at $2,012.60, up $11.78. Silver is trading at $24.84, up 51 cents. In a recent FT article, Jay Newman and Richard Carty discuss the growing concerns around the use of dollar-based digital instruments, stablecoins, and crypto exchanges, particularly in relation to their impact on the global financial system and U.S. economic policies. These instruments pose risks to the traditional dominance of the U.S. dollar in international finance and they could undermine the United States’ ability to enforce economic sanctions and monitor financial transactions. Crypto stablecoins and exchanges, especially those tied to the Chinese Communist Party (CCP), could challenge U.S. financial supremacy by providing alternative, stateless, and unregulated platforms for monetary transactions. These platforms, being outside the global regulatory net, could be used for both legitimate and illicit activities, making them risky assets with no underlying collateral. Large-scale acceptance of these tokens could weaken U.S. legislative tools like the Trading with the Enemy Act and the International Emergency Economic Powers Act. The authors suggest, “One solution could be for the US government to create its own crypto exchange or to issue its own crypto token, but the Fed or in Congress are dragging their feet. Ignoring a problem won’t make it go away.”

USAGOLD Comment: The calls for a US CBDC get louder and louder under the guise of the government’s need to enforce economic sanctions and monitor financial transactions.