What would the world economy look like if national currencies were still backed by gold? Even if there are many who defend this idea, it probably won’t happen again. However, a similar move is emerging, this time with stablecoins pegged to the gold, as a report issued by CryptoResearch.Report points out.
The idea of those who support this movement is to enjoy the best of both worlds. First, a stablecoin pegged to the gold does not suffer the volatility of decentralized cryptocurrencies such as the bitcoin. Secondly, it would be an immutable digital representation of the gold. In addition, bitcoin and gold are seen as a store of value, with several similar features.
The fact is that the hegemony of the dollar has been under increasing pressure from China and Russia, just as the U.S. national debt reaches new records. Given such scenario, it would be no surprise if, instead of returning to the gold standard, the 21st century will witness the emergence of a gold standard involving a cryptocurrency backed by this precious metal, the document points out.
Gold stablecoins are still optimistic promises
However, according to the document, this is likely to be an optimistic promise. For several decades, countries around the world have tried to tie their exchange rates to other stable currencies. However, none of these attempts lasted in the long run.
Although stablecoins pegged to the gold are similar to gold ETFs, there are some differences. For example, there are no licensed exchanges to sell tokenized gold ETFs. In addition, investors have to take measures to protect their private keys and will be subject to increasing transaction fees.
Currently there are approximately 50 cryptocurrencies pegged to gold. Gold-backed cryptocurrencies are considered “backed currencies out of the chain”, because they generate value from the gold deposit, gold certificates and other gold-related securities.