Russia Planning a New Gold Standard to Rival the London Bullion Market Association (LBMA)
In recent years, the London Bullion Market Association (LBMA) has been facing increasing scrutiny for its management of the global gold market. Many in the industry have expressed concerns about the LBMA's control over the price of gold and its lack of transparency. In response to these concerns, Russia has announced that it is planning to create a new gold standard that will rival the LBMA.
The move comes as part of Russia's ongoing efforts to reduce its dependence on the US dollar and strengthen its own currency. As the world's largest producer of gold, Russia has significant influence over the global gold market. By creating its own gold standard, the country hopes to increase its control over the market and establish itself as a major player in the global economy.
At present, the LBMA is responsible for setting the price of gold and maintaining its quality standards. The organisation is made up of a group of large banks and precious metals dealers, who control the majority of the world's gold trading. This has led to accusations of price manipulation and lack of transparency, particularly in the wake of several high-profile scandals in the industry.
By creating its own gold standard, Russia hopes to address these concerns and establish a more transparent and fair market for gold trading. The country has already taken steps to increase the transparency of its gold reserves, announcing in 2020 that it had increased its holdings to over 2,000 tonnes.
The new standard is expected to be based on the Moscow Exchange's benchmark price for gold, which is already widely used in the industry. This will give the new standard immediate credibility and make it more attractive to investors and traders.
In addition to creating its own gold standard, Russia is also exploring the possibility of creating a digital currency backed by gold. This would give the country even greater control over the global economy and help to further reduce its dependence on the US dollar.
While the move is likely to be welcomed by many in the industry, it is likely to face opposition from the traditional players in the market. The LBMA and other large banks and precious metals dealers are likely to resist any efforts to undermine their control over the market. However, with Russia's significant influence over the global gold market, it is likely that the new standard will gain traction and establish itself as a viable alternative to the LBMA.
In conclusion, Russia's plans to create a new gold standard have the potential to transform the global gold market and establish the country as a major player in the global economy. By increasing transparency and reducing the influence of large banks and precious metals dealers, the new standard will help to create a more fair and equitable market for gold trading. While there are likely to be challenges and opposition from the traditional players in the market, the new standard is likely to gain traction and establish itself as a viable alternative to the LBMA.