by Azowad Abrar
Many people are calling for the Gold based exchange rate for their countries’ currency. But the questions are,” What will happen after the world returns to Gold? Who will gain strength because of the newly adopted system? Can the majority of the countries use this system as only a few powerful countries have access to most of the Gold reserve? Who else uses it now? Will the 195 countries of this world be able to back their economy simply by only Gold?” I asked a lot of questions and after answering all of them one might think that Dollar based economy is irreplaceable. But that is not true. So, what is the future?
Before diving into the topic, let’s remember a few things. Around 70% of gold is produced in only 17 countries and only 44 of 195 countries produce Gold. So, all other countries must purchase a huge amount of Gold or start doing business in the countries where Gold is produced in huge amounts. In this world, you need Dollars for international trade. If you put a burden on the Foreign Currency Reserve for purchasing Gold, it will impact your economy negatively. So most the countries will need to increase their Gold reserves slowly as they can’t increase their Gold reserves drastically.
China, Russia, Turkey and five or six more countries can’t switch to the Gold based system if the world is not prepared for it. Both sides need to agree that they will use Gold as their currency standard. A joint committee is also needed so that things can go on transparently.
If we want to look for a solution, we can’t sit idle with the problems. Let us go to the bottom line. Why do we need Dollars? We need it for international transactions. What do we need for international transactions without Dollars? We need a Digital, Secured, and Well-Monitored system. For the survivability of the new system, we need to follow Abrar’s SEP(Structure Enforced Process) Approach.
So, what is Abrar’s SEP Approach? I named this approach the Structure Enforced Process Approach. The governments will create a joint economic structure. The structure will consist of eight different things and groups such as Business Interested in Joint Production, Judiciary, Trained-Up Government Officials, Process, Promotional Channel, Market, Developers(Skilled with technology) and Civil Society.
All elements of the structure depend on one another. To protect the structure from collapsing, the structure will enforce a Digital System. The new digital system will consist of three major things such as Blockchain, Common Central Bank Digital Currency(CCBDC), and Digital Contract. A new Bank will be created by the Central Banks of different countries for operating the entire process. The bureaucrats of these countries must be trained in emerging technologies. Joint production and necessary economic deals should be signed between these countries. The use of the new Common Central Bank Digital Currency should be given priority in these projects.
Joint production and economic cooperation should be the instruments in pursuing the other countries in using the Common Central Bank Digital Currency. Countries with very little Gold reserves but with huge natural resources can join the economic cooperation and accept this new CCBDC. There will be no condition of giving up Dollars in favour of CCBDC but will pave the way for new opportunities. In this way, these countries can gradually shift from Dollars to other systems.
Developing such a huge system is not like walking in the park. There will be challenges and obstacles. The technology giants can stop their support at any time. This is why the structure needs to invest heavily in its own Banking Network, Satellite Internet, and Server. The structure needs to start working with the development of an effective workforce. The current system has a lot of stakeholders. If the government pushes for the new system all of a sudden, it may cause a disturbance in the economy. This is why a decades-long gradual process is encouraged to follow. But the sooner the government starts the better.