Moscow plans to remove its 20 percent tax on individuals who buy precious metals. This is reported by the Russian state newspaper. Gazeta Rossiyskaya quoting Finance Minister Anon Siluanov. At the same time, buying US dollars will be made more difficult by a tax. Gold would thus become the last lifeline for the threatened private assets of Russian citizens. The push could pave the way for a return to some kind of gold standard at the national level, a near-historic event.
Introduced internationally as the Bretton Woods Agreement in 1944 and abolished by the US in 1971, the gold standard has never been revived. Its guiding principle: a state’s currency is linked to existing real gold reserves to guarantee its value, as a hedge against inflation. With this step, Putin obviously wants to allay the fears of the Russian population and oligarchs of an economic crisis. And so he can offer all citizens an outlet for their assets that are not based on the US dollar.
Escaping Sanctions: Gold vs. Crypto
There are several reasons why Moscow relies on gold as an outlet and not on a decentralized currency like Bitcoin: Moscow has been promoting the precious metal for many years to become more financially independent, especially from the US dollar, in which many Russians invest the wealth accumulated before the war. Putin can also control gold better than the financial flow of Bitcoin. For days, the US has been demanding that Russians be excluded from the crypto space as much as possible, for example by freezing their accounts on centralized exchanges like Coinbase. Until now, most CEOs still reject it.
Above all, however, Russia has bought more gold than any other nation in recent years, with total reserves amounting to some 2,000 tons, the equivalent of US$132 billion. In 2014, when Crimea was annexed, it was only around 42 billion. With this supply and all the other currencies, Russia could hold out financially for almost two years.
Russia’s escape from sanctions is also the subject of today’s BTC-ECHO podcast:
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