Cryptocurrency will never replace gold

There is no replacement for gold yet

Despite the fact that the world’s central banks may begin gold demonetization, there is no replacement for gold yet, RISS expert Mikhail Belyaev says. According to reports, central banks are planning to remove gold completely from the international monetary system, which means that gold will be abandoned as a reserve asset.

In expert’s opinion, today gold is a reliable asset for storing both public and private funds. Central banks may ban private ownership of gold in order to fight inflation. But that's not exactly true, Belyaev points out. Central banks are actually going to buy gold from the population, but such a step will eventually lead to inflation.

What can replace gold? Some people believe that cryptocurrencies can substitute it. But they are not backed by anything other than trust. There are also so many cryptocurrencies that people do not tend to pay much attention to. Thus, cryptocurrencies can’t be a reliable safe-haven asset. Cryptocurrencies are not controlled by any central authority yet, Belyaev outlines. This means that sometimes it is convenient to pay with cryptocurrency: you can do it quickly and anonymously. RISS expert drew attention to the fact that stablecoins were gaining popularity over other types of digital currencies because they were backed by conventional currencies and gold.

“What is the difference between gold and cryptocurrency? After all, paper money is just one form of money and exists in digital form. If central banks dump gold in favor of cryptocurrencies, global economy will suffer for years to come. Unfortunately, gold also has some disadvantages. It can’t be used as an energy resource or food. All attempts to replace gold with something else have failed. There is no alternative to gold,” Belyaev concluded.

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