US Treasury Secretary Scott Bessent Warns About Possible Chinese Gold-Backed Currency
The Trump Administration is closely scrutinizing the Chinese government’s developments in the digital asset field.
At a recent hearing before the Senate Banking Committee, U.S. Treasury Secretary Scott Bessent stated that China might be designing new digital assets to undermine the dominance of the U.S. dollar in today’s financial ecosystem.
Answering a question inquiring about the possibility of building an alternative, digital asset-led financial system by China, Bessent stated:
We don’t know that for sure. There are lots of rumors about Chinese digital assets, maybe backed by something other than the RMB, perhaps gold-based.
Furthermore, Bessent acknowledged that the Hong Kong Monetary Authority (HKMA) has a “very large sandbox,” and that it actively traveled the world to find new mechanisms for this task. “I would not be surprised,” he concluded.
Bessent’s statements resonate with the predictions of many analysts, who link China’s continued gold purchases and those of BRICS countries, including Russia, to a preparation period for issuing a gold-backed currency to intermediate trading transactions without U.S. involvement.
Alexej Jordanov, a content architect at Goldrepublic, argued that such a currency would “enable real-time settlements, reduce delays, and foster trust among participants. Such a system might even attract nations outside the bloc seeking alternatives to dollar-dominated networks.”
Legendary economist Jim Rickards, who has written extensively about the power of currency in conflicts, stated that a gold-pegged currency would do wonders for the BRICS bloc in 2023, when the debate about the issuance of a bloc-wide common currency was still active.
Nonetheless, the bloc has shifted to using national currencies for trade. In July, President Donald Trump threatened to implement significant tariffs on countries aligning with the “anti-American policies” of the BRICS group.
Even as President-elect, Trump threatened BRICS countries with 100% tariffs if they ever created a common currency to rival the U.S. dollar.
FAQ
What is the Trump Administration’s stance on China’s digital asset initiatives?
The Trump Administration is actively monitoring China’s developments in digital assets amid concerns that they may challenge the U.S. dollar’s dominance.What did Treasury Secretary Scott Bessent state about China’s potential digital assets?
Bessent indicated that rumors suggest China may develop digital assets backed by commodities like gold to undermine U.S. financial influence.How are China and BRICS related in terms of currency strategy?
Economists believe that China’s gold purchases, along with those of BRICS nations, may be preparing for a gold-backed currency to facilitate trade without U.S. involvement.What previous actions has President Trump taken regarding BRICS countries?
Trump has threatened substantial tariffs on countries aligned with BRICS if they pursue anti-American policies or establish a common currency to rival the dollar.
