Russia wants to break western monopoly on gold standard; plans its own quality mark and trading platform for precious metals

Russia wants to break western monopoly on gold standard; plans its own quality mark and trading platform for precious metals
Russia wants to break western monopoly on gold standard; plans its own quality mark and trading platform for precious metals

Russia is working on a stock exchange for precious metals and its own standard for gold, provisionally called the Moscow World Standard (MWS). The Kremlin has expressly pointed out that its exchange should be an alternative to the London Bullion Market Association (LBMA).

Under the Western sanctions imposed against Moscow, the London gold market organization LBMA has withdrawn the accreditation of six Russian smelters; as a result, the Russians can no longer offer gold on the internationally important gold exchange. For Moscow, which is the second largest gold percentage in the world after Beijing, this arouses a lot of annoyance. That is why the Kremlin wants to launch its own gold standard and precious metals exchange.

The Russian Ministry of Finance states in a letter, from which various Russian media are quoting, that the creation of this Moscow World Standard (MWS) is “critical”. The project would “normalize the operation of the precious metals industry” and provide an alternative to the LBMA. The foundation of this new structure will be a new specialized international precious metals exchange headquartered in Moscow, which will be based on the MWS.

Set prices

The Russians want to determine the prices of precious metals themselves. Also would sit on a rate setting committee: Central banks and other major financial institutions from the Eurasian Economic Union (EEU). Member states of this union are Russia, Kazakhstan, Belarus, Kyrgyzstan, and Armenia.

The current plan is to link prices to either one of the national currencies of the countries in the EEU or to create an entirely new currency for it. For example, Russian autocrat Vladimir Putin already spoke about a currency specifically intended for the BRICS countries (an acronym for Brazil, Russia, India, China, South Africa, ed.). This currency would be used for international trade, making transactions outside the union smoother.

The intention is to make the stock market very attractive to major gold players such as China, India, Venezuela and Pera. If Russia manages to get the support of the latter two South American countries for its plan, the group could eventually control about 62 percent of all the world’s gold, the website estimates. Capital.com.

Platinum, palladium, rhodium

According to its Ministry of Finance, Russia was the second largest gold producer by volume in 2021, with gold production increasing 9 percent to 343 tons.

“A lot of Russian gold in recent years has gone to the London gold vaults, where most Western ETFs hold their gold stocks,” the website writes. Geotrendlines. Due to Western sanctions, the Russians are now simply exporting more gold to other markets, such as the Middle East, India and China.

Russia is also one of the top three producers of platinum, palladium and rhodium. The entire precious metals industry in Russia accounts for a turnover of approximately USD 25 billion per year.

The article is in Dutch

Tags: Russia break western monopoly gold standard plans quality mark trading platform precious metals

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