Every few years, finance unveils its next big thing. It is usually promoted as faster, safer, and smarter than whatever came before. Along the way, older forms of wealth, especially gold, are painted as relics. We saw it with Bitcoin. Its champions claimed it would replace gold, only for time to reveal that while the digital newcomer had its place, the precious metal never left the stage. It is always the same story: the new draws excitement, the old provides endurance.
Now it is the turn of stablecoins. Once a niche tool for crypto traders, they have grown into a market so large that the biggest issuers now hold more U.S. government debt than some G7 countries. Congress has passed new laws to bring them into the financial mainstream. Banks are lobbying furiously about their impact. Some issuers are even tying stablecoins to gold. This is no longer a sideshow. It is a development worth examining. What are stablecoins, what risks (and benefits) do they carry, and what can they teach us about wealth that endures
What is a stablecoin?
A stablecoin is a digital token, usually pegged to the U.S. dollar. The issuer promises that each token can be redeemed for one dollar, and backs that promise with reserves in cash and short-dated Treasuries. This makes them attractive as a payment rail: settlement in seconds, minimal fees, global reach. What started as plumbing for the crypto world has become serious infrastructure, with transaction volumes at times surpassing Visa.
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Scale matters. Tether alone holds more than 100 billion dollars of U.S. Treasury bills, more than Germany. Circle holds another 45 to 55 billion dollars. Together they are among the largest private creditors to Washington. Their inflows help fund U.S. debt, while their outflows could spark liquidity shocks. A decade ago they barely existed. Today they sit alongside sovereign nations as critical buyers of U.S. debt.
The gold-backed stablecoin pitch
Some issuers now peg their tokens to gold. The marketing is neat: own “digital gold bars” without the “hassle of vaults, security, or transport”. But this is where distinctions matter, because that “hassel” is precisely what makes gold and silver so important.
At GoldCore we have spent decades making physical, allocated ownership as straightforward as possible. Our clients own specific bars and coins, held securely in vaults, in their own name. The gold is theirs, not ours. It is not lent out, and it is not turned into a token that someone else promises to redeem.
A gold-backed stablecoin, by contrast, is not ownership. It is a claim. Your link to the bullion depends on the solvency of an issuer, the accuracy of their audits, and the goodwill of regulators. You have swapped tangible sovereignty for another layer of credit. The supposed hassle of real ownership, whether storage, custody, or insurance, is not a flaw. It is proof that you own the thing itself. That is why central banks repatriate gold, and why long-term investors hold bars, not promises.
Sovereignty and fragility
Stablecoins do not just change payment mechanics. They reshape sovereignty. By extending the reach of the dollar far beyond U.S. borders, they weaken local monetary policy in other nations and complicate capital controls. They also create a new fragility. When demand for stablecoins rises, issuers buy more Treasuries and ease yields. When redemptions come, they sell, and yields spike. In a downturn this could resemble a bank run at internet speed. These are not distant possibilities. They are inherent in the structure.
The lesson for investors
Innovation is not to be dismissed. Stablecoins make transactions faster and cheaper. They will find their place, as Bitcoin has. But they remain credit. They depend on promises.
Gold and silver owned as physical, allocated assets are different. They are not someone else’s liability. They are not contingent on regulators or issuers. They are simply wealth, enduring across centuries of financial experimentation.
Every generation produces its innovation. Most of them prove useful. But none have displaced gold and silver. The reason is simple. When confidence falters and promises wobble, value seeks safety in assets that require no counterparty. The hassle of real ownership is precisely its strength.
J. P. Morgan told Congress in 1912, “Gold is money, everything else is credit.” Stablecoins, however clever, belong to the world of credit. Your protection against fragility is to own the timeless asset itself.
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