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

Kitco News

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

"The run-up in the dollar… has hampered other countries' ability to set their own monetary policy," he said. "Whether it's a primary currency or a secondary stable product that's backed by precious metals or gold or a basket, what that does is to give central bankers… another tool in their chest to give sovereignty around their currency."

The U.S. dollar index (DXY) has risen by 16 percent over the year.

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

"I see it as an alternate system for a government," he said. "But I certainly think that people are going to be able to spend these stable currencies in the same way that they can spend their dollars or rubles or rupees."

Soni spoke with David Lin, Anchor and Producer at Kitco News.

Gold's YTD performance

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

Soni said that gold's performance has been stable, given volatile and uncertain investment conditions, and that gold will likely see improvement.

"One of the big challenges in this market, where no one knows what the Fed is going to be doing, is people can become a little paralyzed," he said. "When you look at some of the actual experts in banks who see gold at a $2,000 to $2,400 level over the next year or so, that is a fantastic outcome."

Investment firms like Goldman Sachs have forecast a gold price above $2,000 within the next twelve months.

Soni claimed that those who own risk assets like Amazon stock or Bitcoin "expect a little more downside."

"Even just a flat to moderate up is still pretty strong," he added. "The number one rule, as an investor, is don't use money. Gold is one of the best places to not lose money over the next six to twelve months."


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Gold on the Blockchain?

Soni's company, Matador Gold Technologies, allows users to purchase gold safely and securely through blockchain technology.

"We built Matador to let people 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 at the vault."

Soni suggested that Matador is more trustworthy than ETFs, since every  transaction is tied to a "digital receipt" on the blockchain.

"Some tokenized products, you can't really trust them," said Soni. "[Whereas] you can verify on the blockchain that you've purchased gold on Matador, and that it's sitting in a vault."

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

Follow David Lin on Twitter: @davidlin_TV

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Disclaimer: The views 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 accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.