History Shows Reserve Currencies Come & Go, So, Central Banks Stockpile Gold, Is Bitcoin Next On The List?

History Shows Reserve Currencies Come & Go, So, Central Banks Stockpiling Gold, Is Bitcoin Next On The List?

  • Central banks and foreign governments buying gold at the fastest pace in six years
  • US Dollar’s days as a reserve currency are numbered
  • Just a decade old, Digital gold – Bitcoin could emerge as a global reserve currency

Recently, we reported how the World Gold Council in its quarterly report highlighted that central banks and foreign governments around the world are hoarding gold at the fastest pace in six years.

This says a LOT about not just the value of the yellow metal but also the future of the US Dollar.

Central banks and governments that used to pile up trillions of dollars in reserves have now switched to gold. As the World Gold Council report shows us, central banks are buying more gold than previous years. Net gold purchases in Q1 of 2019 has been about 70% more than in Q1 of 2018.

China is leading this race along with Russia, Qatar, Turkey, and even Colombia by diversifying into gold.

The primary reasons for stockpiling US Dollar has been because it has been a global reserve currency for seventy-five years and big institutions use government debt as a form of money and US debt is the most liquid market in the world.

However, with the US federal government debt reaching $22 trillion, adding $1 trillion each year puts a serious impact on its ability to repay obligation to foreign creditors. Per the Federal Reserve's own financial statements, it is close to insolvency. Additionally, the escalating US trade wars put pressure on the dollar.

The Days Of The US Dollar Are Numbered

Historically, reserve currencies come and go. Reserve currencies go all the way back, as decades before it was British pound then Dutch guilders among others. Today, it’s US dollar.

Reserve Currency Status

In the near future, there is no fear of its dominance but in the long term, the days of the US dollar as a reserve currency are numbered.

That’s why gold has been used for wealth preservation throughout human history because it is scarce, portable and has global demand.

However, it’s not only gold anymore. Bitcoin, the leading digital money or digital gold is even more valuable than gold because of its fixed supply, verifiability and more portability than gold.

“An awful lot of our international power comes from the fact that the U.S. dollar is the standard unit of international finance and transactions,” said U.S. Democrat Congressman Brad Sherman recently at a meeting of the House Financial Services Committee. He further added, “It is the announced purpose of the supporters of cryptocurrency to take that power away from us.”

In reference to this, Anthony Pompliano said:

“He sees the increased probability that we are moving to a world where non-sovereign currencies are the default and it sounds like he is scared.”

Sooner or later, just like other reserve currency, the US Dollar is bound to lose its dominance and that would be the time when Bitcoin would emerge as a global currency. It could even overpower gold which is being used as money for over 3,000 years ago while Bitcoin is just a decade old.

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AnTy
AnTy
AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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