Gold Positioned to Succeed as a Digital Asset
While the cryptocurrency market struggles to gain broader adoption in global financial markets, gold could be uniquely positioned to succeed as an accepted digital asset, according to Randy Smallwood, CEO of Wheaton Precious Metals and the Chair of the World Gold Council.
Gold continues to establish itself as a global store of value, attracting a new generation of investors who have lived through unprecedented uncertainty and volatility. Smallwood highlights the rarity of gold as its key value proposition, contrasting it with the inundation of digital coins in the market.
Bitcoin’s lackluster performance in 2023 may pave the way for gold to shine in the digital marketplace. The World Gold Council has observed significant interest from banks worldwide in digitizing physical gold.
Smallwood asserts that Bitcoin lacks backing and real value. He believes the world needs a gold-backed digital token that represents physical gold and can be freely traded.
The WGC, through its Gold247 initiative, is actively developing gold’s digital infrastructure and facilitating partnerships within the sector.
Gold vs. US Dollar
Smallwood also notes that central banks are increasing their gold reserves to back their currencies with tangible assets. While there is growing competition to challenge the US dollar as the world’s reserve currency, the original BRICS nations still have a long way to go.
He further emphasizes that the US dollar’s status as the main reference currency is due to its strong gold backing. China understands this and continues to build up its gold reserves in its central bank. Smallwood believes that if a currency wants to compete with the US dollar, it must have strong gold backing.
Overall, Smallwood highlights the importance of educating millennials and the youth about the value of gold in order to establish a strong competitor to the US dollar.