From the earliest historical records of Arabian gold discoveries, to the artifacts of ancient Egyptian tombs, to the gold rushes that shaped nations, gold has been a cornerstone of economies and cultures worldwide for more than four thousand years. Its alluring beauty and rarity have established it as a universal measure of wealth for both nations and individuals; it is money that supports the value of nations’ currencies, and it transcends borders, empires, and eras.
Alarmingly, the relationship between gold and currency has undergone a radical transformation over the past 50 years. Once nations touted their gold reserves as a tangible assurance that their paper money had real value, and was not just another fiat currency. Today, however, the grim grip of economy-destroying inflation is growing worldwide, leading BRICS nations and other savvy nations to enlarge their gold stockpiles. Global inflation is causing many leading experts to suggest returning to some sort of gold standard, to stabilize the value of currencies worldwide.
One of those experts is David Roy Newby, a prominent figure in the cryptocurrency and gold investment spheres. Reflecting on the current state of affairs, Newby highlights one critical fact: “As abundant as it had been in the past, the world’s gold supply at current levels is wholly insufficient when balanced against soaring global debt, which is driving growing inflation and exerting dangerous pressure on the global economic infrastructure.”
He continues, “For centuries, humanity has seen wealthy nations exploiting the natural reserves of poorer nations. The fact is that the technical complexity and the cost of harvesting the depleting mineable reserves of gold continues to escalate, and most easy to mine gold has been mined already. The pattern of economic dominance which has persisted for such a long time has tremendously strained the world’s most precious resources, at a time when gold is needed more than ever to support the value of failing fiat currencies.”
Indeed, the difficulty and cost of sourcing and mining gold is climbing at alarming rates, with a number of experts warning that mining it may become unsustainable by 2050. This information has not escaped the notice of central banks who have quietly increased their gold reserves for the past several years, and now control about $3 trillion of the $12 trillion of existing mined gold.
Fractional reserve banking has drifted into perilous territory today. Debt has become more dangerous to national economies and the global economy than weapons of war. Debt upon debt has been layered, resulting in an unsustainable financial house of cards. As this debt collapse begins to cascade, the demand for gold and gold-backed financial instruments will soar.
Approximately $5 trillion of gold is used in jewelry, a small amount is used industrially, and the rest is in coins and bars. The global banking system, however, has roughly $2 quadrillion dollars of debt backed by only $3 trillion of gold reserves held by central banks. This equates to an almost 1000-fold ratio of debt to gold, and it is becoming increasingly obvious that neither the USA or the global economy can long survive the pressures created by debt at this level.
Newby insists that the best way to solve this debt dilemma is to provide alternative, more sustainable solutions within the gold investment landscape, before the current debt to gold ratio causes economies to crumble. In his words, “What the world needs now is a new gold standard.”
In an effort to provide one such solution, Newby has leveraged his unique, dual expertise in crypto and traditional gold investments to create Gold Plus Coin, a company that tokenizes in-ground gold assets. This expands how gold’s value can be represented and traded, potentially addressing the limitations of above-ground gold storage and gold transportation.
The implications of such an approach are multifaceted. First, tokenizing gold assets could lead to a reduction in the environmental impacts associated with traditional gold mining. More importantly, this provable store of value will serve as an economic anchor both on balance sheets and as a tangible reserve against the storms of economic volatility.
Historically, gold has been viewed as a stable asset in tumultuous financial times. Gold Plus Coin plans to offer digital tokens anchored by the value of proven gold reserves in a portable, scalable, and accessible form for both large transactions, and for the average person to utilize as a financial safe-haven asset.
The concept of making gold ownership more accessible transcends mere financial opportunity; it is also about creating a more level playing field in the global economy, suggesting a shift toward more inclusive financial systems.
“Imagine a world where a small-scale investor in Asia, South America, or Africa can have the same access to gold assets as large investors in New York, Dubai, or London,” Newby says. “This is where I think our collective efforts should aim.”
This is precisely where the appeal of integrating real-world value commodities into the crypto ecosystem becomes most prominent. Newby believes that this integration could potentially free up more liquidity and help stabilize global banking systems, and help protect the wealth of individuals, retirement plans, companies, & even countries. Such an endeavor would make a world of difference for those nations lacking the mechanism or capital to unlock their ‘monetary potential’ held in previously unmined assets.
“There are countries with tens or hundreds of billions of dollars of potential liquidity for their economies, but with no ways of achieving this currently,” Newby shares. “Gold Plus Coin plans to empower resource-rich but monetarily poorer countries, so their in-ground resources can be used to sustainably grow their economies most quickly; when we achieve this vision, we can live to see a world where every nation and individual has maximum control over their financial destinies.”
Tokenizing (and monetizing) gold reserves is a key step in fulfilling this abundant vision to create stronger, more stable banks, and stronger economies. Though the tokenization landscape is still in its formative years, he sees great potential in it and aims to stay ahead of the curve, hoping to help create a new era of financial stability, inclusivity, and abundance for all.
As Newby concludes, “We don't need more cryptocurrencies with nothing tangible backing them, that are as fiat as existing currencies globally. We need tokens that are backed by real-world assets, that will offer stability and liquidity to economies, without further straining the existing resource infrastructure. Gold Plus Coin is excited to work with more governments and private gold mine owners to offer gold-backed tokens to the marketplace in 2024 and beyond.”
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.