Gold Remonetization in the Digital Currency System: Pro & Contra

The relevance of the study was determined by the following circumstances: the crisis of confidence in the international monetary and financial system (IMFS), the search for alternative reserve assets, and the growing demand for gold as a protective asset that is not an obligation. The subject of the research is the remonetization of gold in a digital environment. The purpose is to identify the possibility of combining the processes of gold remonetization and digitalization of IMFS. The methods of theoretical, logical, contextual, retrospective and system analysis were used in the course of the work. The problem of gold remonetization is considered by the author within the framework of traditional monetary theory in the context of the main functions of money and is interpreted as a process of strengthening the systemic role and importance of gold due to the loss of confidence in the US dollar, while the main function of gold is to preserve the value of reserves and savings, as well as the purchasing power of means of payment in the context of an uncontrolled increase in global money supply. It has been established that in the context of geopolitical and sanctions risks, gold is becoming a sought-after reserve asset and is potentially capable of ensuring the process of remonetization. As a result of the research, the author came to the following conclusions: the possibilities of tokenization technology make it possible to implement gold in the digital IMFS, removing a number of limitations typical for monetary gold. The issuance of goldbacked digital instruments by government agencies, international organizations, or supranational structures will help transfer their circulation from private to the official level of the IMFS. At the same time, the global remonetization of gold in the digital economy is unlikely, whereas the creation of an international digital currency backed by gold by a group of interested countries with payment and reserve functions has a high chance of implementation.

1. Dooley M., Folkerts-Landau D., Garber P. US sanctions reinforce the dollar’s dominance. NBER Working Paper, 2022; 29943. DOI: 10.3386/w29943

2. Krylova L. V., Mudretsov А. F., Prudnikova A. A. Significance of International Reserves in the Global Anti-Crisis Financing System. Studies on Russian Economic Development. 2024;35(3):423–429. DOI: 10.1134/S1075700724030080

3. Krylova L. V. Directions of possible transformation of the world financial architecture. Problemy teorii i praktiki upravleniya = Problems of management theory and practice. 2022;(5–6):6–25. (In Russ.).

4. Pishchik V. Ya., Alekseev P. V. Features and factors of the implementation of the function of world money by reserve assets in the modern GMFS. Finance: Theory and Practice. 2024;28(5):21–30. (In Russ.). DOI: 10.26794/2587-5671-2024-28-5-21-30

5. Vinokurov E. Yu., Grichik M. V. New concept of international reserves: Security, diversification, unorthodox approaches. Voprosy ekonomiki = Economic Issues. 2022;(12):24–43. (In Russ.). DOI: 10.32609/0042-8736-2022-12-24-43

6. Belitchenko P. D. Features of the formation of commodity and digital monetary systems in the context of multipolarity. Mirovaya ekonomika i mirovyye finansy = World Economy and World Finance. 2024;3(4):63–70. (In Russ.). DOI: 10.24412/2949-6454-2024-0360

7. Belenchuk S. I., Zenkina E. V., Kostromin P. A., Kokorev I. A. Tokenization of money circulation and the new Bretton Woods. Innovatsii i investitsii =Innovations and Investments. 2024;(9):428–432. (In Russ.).

8. Arslanalp S., Eichengreen B., Simpson-Bell Ch. Gold as international reserves: A barbarous relic no more? Journal of International Economics. 2023;(145). DOI: 10.1016/j.jinteco.2023.103822

9. Krylova L. V. Digital technologies in the system of financial mechanisms of international settlements with the participation of Russia. Ekonomika. Nalogi. Pravo = Economy. Taxes. Law. 2024;17(6):25–33. (In Russ.). DOI: 10.26794/1999-849X‑2024-17-6-25-33