Russia returns to gold standard to alleviate global economic sanctions

Key Takeaways

• Experts say the proposed bill will soften the impact of the sanctions on the Russian economy.
• Russia’s switch to gold was in its best interest, says expert.

LAGOS (CoinChapter.com) — Reports have emerged that Russia is planning to return to using the gold standard, a monetary system in which the Russian Ruble is pegged to a fixed value of gold.

On Thursday, a Russian lawmaker disclosed government plans to pass a bill to remove a 20% value-added tax on gold investments. Doing so will stabilize the financial sector in Russia and allow people to invest in other precious metals against the U.S. dollar.

The lawmaker noted that the proposed bill had been submitted to the Duma, the lower house of parliament. The bill, if passed, will help Russia alleviate the impact of sanctions imposed on it by several powerful countries.

Sanctions imposed on Russia resulted in the Ruble’s decline, which dropped by 30% against the dollar on Monday. However, experts currently believe that the proposed bill will soften the strains of the sanction on the Russian financial sector.

Will Russia Return To The Gold Standard End The Old Financial System?

Russia’s return to the gold standard has triggered many people and generated mixed reactions. Twitter user @Lizzie59293499 noted that the bill would lead to the eradication of the old financial system.

She said, ”This is a way to ensure people can invest securely in something other than the dollar (usually people hold their cash in dollars as the ruble is volatile.) – Counter sanctions commission.”

Erick Taylor and several noted that Russia was trying to monetize gold, also benefiting the crypto industry. Similarly, Lyn Alden explained only Russians who invested in commodities like gold and bitcoin would be safe from the current financial woes.

However, Brian McNally argued that while the gold standard was returning, it would collapse the traditional financial sector and the crypto industry.

“The gold standard will be coming back and the dollar will plummet along with crypto… real gold is far greater than paper and something virtual… jus sayin… y’all been warned,” he tweeted.

Famed value investor Bill Miller also indicated that Russia’s switch to gold was imperative and in its best interest. He explained that 22% of Russia’s reserves in gold are the only major assets not controlled by western powers. Russia currently has 16% of its $640 billion reserves in dollars and 32% in euros, controlled by states looking to hurt Russia.