As countries around the world intensify efforts to create their state-backed digital currencies, experts are warning that the days of US Dollar dominance could be coming to an end. China is aggressively working on its digital yuan currency and 4 of its major cities are already running trials. Should this central bank-backed digital currency materialize, this would pose a significant threat to U.S Geopolitical power and US Dollar supremacy. Hence, it would be a grave mistake for the US to sit idly by watching things unfold.
A potential threat to the Dollar?
If there is widespread adoption of a digital yuan or other digital currencies in international trade, this would pose a serious threat to a US currency that ruled unchallenged for decades. It might be the beginning of a new international monetary era and a threat to traditional financial systems. China has long been exploring ways to circumvent the dollar in trade relations. They are determined to mitigate the effects of US-based sanctions and exclusion, and their digital yuan currency if realized may well allow them to do so.
Pressure Intensifies for a US Digital currency
There are growing calls for the US to respond and create its very own digital USD, and on June 30th, 2020, the Senate Banking Committee held a hearing on the future of the digital dollar.
Senator Tom Cotton asserted, “The U.S. needs a digital dollar…The U.S. dollar has to keep earning that place in the global payments system. It has to be better than bitcoin, it has to be better than a digital yuan.”
It is unclear how serious US regulators are about the possibility of a digital dollar. However, with China pressing ahead with its digital yuan, this may force U.S. regulators to have more serious discussions and take more concrete actions.
A US Digital Currency backed by Gold?
So far, the US seems more open to discussions around a State-backed digital currency, tied to the US Dollar. However, Trump’s economic advisor, Judy Shelton seems supportive of a Gold-backed digital dollar. She continues to advocate for the gold standard with a digital currency component and recently reiterated “I like the idea of a gold-backed currency, it could even be done in a Cryptocurrency sort of way”
One thing is for sure, the changes being facilitated by emerging innovative technologies are inevitable, and the international monetary system could be forever altered. It won’t be business as usual and countries that fail to adapt or take notice will be disadvantaged.
As talks of digital currencies intensify, there are concerns over privacy, the waning influence of the dollar, dollar debasement, inflation, a changed monetary system, etc. all of which could significantly affect your retirement savings.
Gold however is the one safe-haven asset that hedges against all these concerns, uncertainty and maintains your financial privacy, so adding Gold to your portfolio should be considered.
Give us a call at 800-462-0071 to learn how thousands of Americans are using Gold to protect and diversify their retirement income.