Gold-backed digital currency is 'almost a certainty' and can transform monetary policy - Deven Soni

Gold-backed digital currency is ‘almost a certainty’ and can transform monetary policy – Deven Soni

(Kitco News) – As the U.S. dollar appreciates against other currencies, limiting countries’ ability to set independent monetary policy, gold-backed digital currencies are likely to be embraced, Deven said. Soni, CEO of Matador Gold Technologies.

“The rise of the dollar…has hampered the ability of other countries to set their own monetary policy,” he said. “Whether it’s a primary currency or a stable secondary commodity backed by precious metals, gold or a basket, it gives central bankers…another tool in their vault to give the sovereignty over their currency.”

The US dollar index (DXY) rose 16% during the year.

Soni added that a gold-backed currency is “almost a certainty” and said it would be like a return to the gold standard, but gold-backed currencies would not be the primary means of payment for most countries.

“I see it as an alternative system for a government,” he said. “But I certainly think people are going to be able to spend those stablecoins the same way they can spend their dollars or their rubles or their rupees.”

Soni spoke with David Lin, presenter and producer at Kitco News.

YTD performance of gold

Over the year, although gold outperformed assets like Bitcoin (down 57%) and the S&P 500 (down 19%), the price of gold still fell by 10%.

Soni said gold’s performance was stable given the volatile and uncertain investment conditions, and gold is likely to see some improvement.

“One of the big challenges in this market, where nobody knows what the Fed is going to do, is that people can get a little paralyzed,” he said. “When you look at some of the real banking pundits who see gold at the $2,000 to $2,400 level over the next year, that’s a fantastic result.”

Investment firms like Goldman Sachs predict a gold price above $2,000 over the next twelve months.

Soni said those with risky assets like Amazon stocks or Bitcoin “expect a bit more downside.”

“Even just flat to moderate, it’s still quite strong,” he added. “Rule number one, as an investor, is don’t use silver. Gold is one of the best places to not lose money over the next six to twelve months.”

Gold on the Blockchain?

Soni’s company, Matador Gold Technologies, allows users to buy gold securely using blockchain technology.

“We built Matador to allow people to buy gold the same way they can buy stocks on their phone,” he said. “When people buy gold on our platform, it represents [physical gold] sitting in the vault.”

Soni suggested that Matador is more reliable than ETFs, since each transaction is tied to a “digital receipt” on the blockchain.

“Some tokenized products, you can’t really trust them,” Soni said. “[Whereas] you can check on the blockchain that you bought gold on Matador and it’s in a vault.”

To find out if Soni thinks assets like real estate and jewelry can be monetized on the blockchain, watch the video above.

Follow David Lin on Twitter: @davidlin_TV

Follow Kitco News on Twitter: @KitcoNewsNOW

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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