The Independence of Gold in the Age of Parallel Systems

Over recent decades, the transatlantic financial infrastructure in practice constituted the global system itself. Alongside dollar-based settlement, Western banking networks and London’s position as the centre of the gold market, there was no comparably deep and internationally usable alternative. This system is not disappearing, but its exclusive role is gradually changing. New gold custody and clearing centres, settlement in local currencies, interoperable payment networks and digital financial instruments are emerging alongside it. Over time, these processes, which remain separate today, may connect into parallel systems that perform partly identical functions.

Gold occupies a special place in this transformation because its fundamental characteristic does not derive from the financial infrastructure that handles it. Directly owned physical gold has no issuer, no bank liability and no counterparty obliged to perform. Yet its independence becomes effective only if the owner can actually exercise control over it. The decisive questions are therefore where the gold is held, whether it is accessible, under what legal title it is owned and which state’s jurisdiction governs it. New custody and clearing centres do not change the role of gold; they make it possible for the same asset to be stored, settled and mobilised outside the transatlantic infrastructure as well.

London’s historical weight grew out of Britain’s commercial and imperial network and later from a self-reinforcing system of standardised bars, bank settlement, storage, insurance and a deep secondary market. For a long time, however, the advantage of the London infrastructure also rested on the assumption that the Western custody and settlement system would remain a neutral intermediary during political conflict. The Venezuelan central bank’s gold held in London and the freezing of the Russian central bank’s foreign reserves demonstrated that ownership and control can diverge. Legal title may formally remain intact while the asset cannot be transferred, used or sold freely. The practical value of a reserve therefore cannot be separated from access to it.

This experience matters not only to sanctioned states. In central bank risk management, it can make the diversification of custody locations, the expansion of domestic holdings and support for regional markets rational choices, allowing gold to be sold or relocated even during a crisis. Singapore, Hong Kong, Shanghai and the United Arab Emirates are developing the infrastructure needed for the storage, trading, pricing and settlement of gold against different institutional and political backgrounds. Their combined effect is not to eliminate London, but to reduce exclusive dependence on it.

The significance of the new centres comes from the concentration of functions. If secure custody, accepted quality standards, bank clearing, physical delivery, local pricing and a legally manageable digital representation are available within the same region, gold can not only be physically present there, but can also move economically there. Tokenisation can accelerate transfer and make record-keeping more transparent, but it is not the same as direct ownership of gold: the issuer, custodian, segregation of the backing, physical redemption and the jurisdiction of legal enforcement all continue to matter.

Ghana fits into this picture from a different direction. As a major producing country, it is bringing a larger share of domestic production under state control, building central bank reserves, formalising small-scale mining, and gaining greater control over exports and domestic refining. The programme simultaneously uses the old international infrastructure and expands the country’s own room for manoeuvre. This is precisely why it has value as a model: the formation of a parallel system does not necessarily begin by abandoning the existing one, but by a state retaining more value and making more decisions within its own authority.

Alongside the gold market, but conceptually separate from it, payment channels less dependent on the dollar are being built. Physical gold has no issuer liability, while an instant-payment system, central bank digital currency or transaction settled in a local currency continues to operate within a network of bank accounts and monetary institutions. Nevertheless, the two processes can work in the same direction by reducing exclusive dependence on transatlantic infrastructure. The BRICS are exploring the interconnection of national payment systems, while Indonesia and Singapore have already established an operational, direct local-currency settlement channel.

The dollar’s central role continues to give the United States extraordinary sanctions capability, but the use of this power can increasingly no longer be regarded as free of consequences. The larger the targeted country or bank, the greater the potential repercussions for the financial system, trade and the United States’ own interests. American caution towards major Chinese banks does not indicate the disappearance of sanctions power, but reflects the risk that excessively broad coercion could accelerate renminbi-based settlement and the use of non-American intermediaries. Dollar power is not disappearing; the strategic cost of using it is increasing.

The American stablecoin strategy represents the other side of this process. A dollar-linked token can take the dollar to new users without bank branches, while its reserves can generate demand for US government securities. A stablecoin is therefore not merely a crypto-market product, but an instrument for extending the dollar’s international reach. It nonetheless continues to rest on an issuer, a reserve portfolio, a custodian and US legal infrastructure. Physical gold and the stablecoin therefore represent two different responses: one provides a decision-making option outside the system of claims, while the other extends that same system into the digital domain.

The vectors described do not yet form a unified plan. Their longer-term interconnection is, however, a realistic possibility. Outside the transatlantic sphere, a system resting on several pillars could emerge in which regional payment networks, direct currency pairs, central bank digital currencies, commodity-trading channels and multicentred gold markets support one another. The common direction of these processes does not guarantee its creation: the participants’ interests, institutions and currencies differ, and none will readily relinquish monetary sovereignty.

The transition itself already carries significant risks. Defending the position of the transatlantic system and expanding the Global South’s room for manoeuvre may be reflected in sanctions and countermeasures, shifts in trade routes, changes in capital flows, and waves across currency, bond and commodity markets. If a second system later emerges that can independently provide financing and settlement, hold reserves and supply liquidity, the conflict may come to concern the relationship between two major financial and economic spheres.

In this environment, properly owned physical gold is not merely exposure to a price, but a reserve that remains outside the financial system. The scale differs for a central bank and a private investor, but the underlying principle is the same: genuine ownership, an allocated and preferably identifiable holding, accessible custody and adequate insurance are required. Monetary systems and settlement structures can change, while gold may remain an asset transferable from one system to another. Its significance therefore lies not only in its price, but also in the decision-making capacity it can preserve as geopolitical and financial fault lines shift.

The purpose of Unus Multorum is not to tell readers what to think about a particular event. Its purpose is to reveal the connections that allow every reader to form their own conclusions.