According to the Dutch Central Bank, gold is a very reliable hedge against financial uncertainty and if it so happens that the financial system in the world dissolves, the bank’s gold reserves is the best way to rise from the fall. The statement was a part of a full message as recently published on the bank’s website.
De Nederlandse Bank (DNB), as part of the message, has revealed that the bank owns 600 tons of gold, some of it kept with the bank with the rest in the US, the UK and Canada as well. DNB suggests that keeping a large enough reserve is the best way to handle a financial crisis. The statement says:
“[Gold is] the trust anchor for the financial system. If the entire system collapses, the gold stock provides a collateral to start over.”
The statement further contains some specifics about the DNB’s gold reserves. The bank’s own gold vault for example, has at least 15,000 gold bars worth over 6 billion euros. This amount of gold accounts for about 31% of all the gold DNB has worldwide. The statement also says that another 31% is safely stored in New York.
These comments seem to indirectly support the use of Bitcoin and cryptocurrency. Gold has unmatched stock-to-flow (SF) ratio and thus cannot be easily manipulated by external forces. Bitcoin, just like gold, has commendable SF as well and is not prone to manipulation. If DNB is concerned about a hedge like this, it makes sense that other institutions could also consider gold, as well as Bitcoin, a strong enough hedge should any instability occur.
Last year, a Dutch court ruled that Bitcoin is legitimate, valuable and transferable.
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