In World War II many European countries, fearing potential theft of their gold reserves during an invasion, moved their gold to the Federal Reserve Bank of New York. This would later prove to be a poor decision.

“In August 1971, French president Pompidou sent a battleship to New York harbor to remove France’s gold from the vault of the New York Federal Reserve Bank and to transport it to the Banque de France in Paris.”

A “Barbarous Relic”: The French, Gold, and the Demise of Bretton Woods – Michael J Graetz

Unfortunately for France, the United States decided not to give France their gold back, with President Nixon instead reneging on an agreement that had been in place for several decades. This event should serve as a constant reminder of what can happen when a country trusts another nation to safe-guard its assets.

Australia’s finances are managed by the Reserve Bank of Australia (RBA), a government-owned central bank. The RBA publishes its reserve assets on their website. In March 2023, these totalled AU$87.5 Billion. Of this, 88% is fiat currency, ie currency issued by a government, but not backed by anything tangible such as gold. As the supply of fiat currency is unlimited, its purchasing power will decrease until it has no value—this can be observed throughout history and intuited through logic. As Voltaire put it in 1729: paper money eventually returns to its intrinsic value–zero.

Aside from fiat currencies, the RBA owns 80 Tonnes of gold, worth roughly AU$7 Billion, making up 8% of total assets. However, 99.9% of Australia’s gold is stored at the Bank of England with only four bars stored in Sydney. While the gold that is stored in England was audited in 2022, the harsh reality is that other than four gold bars, Australia has no real money stored on our land and under our complete control.

Should we bring our gold back to Australia? This would be a good start, but our 80 Tonnes are a minor holding when compared to other countries. France, Italy and Germany each own more than 2,000 Tonnes of gold. The list of countries that own more gold than Australia includes some surprising entries: Uzbekistan (380T) , Kazakhstan (332T), Lebanon (267T), Thailand (244T), Venezuela (161T), Philippines (158T), Libya (117T). Yes, Libya has more gold than Australia, at least according to the World Gold Council.

While the state of Australia’s finances is not what you would expect for the world’s 13^th largest economy, fortunately there is a rare opportunity for us to drastically improve our situation. A handful of countries have realised that there is a much better way of preserving their countries’ wealth than gold or fiat currencies. El Salvador was the first to publicly do so, making Bitcoin legal tender in 2021. Since then, it has been revealed that the sovereign wealth fund of the Kingdom of Bhutan has been mining bitcoin since 2020, while Lichtenstein have recently announced plans to accept government payments in bitcoin.

Why are these countries adopting bitcoin when gold has been the monetary standard throughout history? Bitcoin has some unique properties that make it far superior to gold as money. Bitcoin, is an open-source software protocol that launched in 2009. It has a capped and known supply of 21 million bitcoin, as opposed to gold that can continue to be mined indefinitely, and fiat currencies which have no supply cap. Bitcoin is native to the internet, enabling international transactions of any size. To achieve this with gold would require physically transporting it by plane, and then the receiver would need to melt the gold to ensure the bars were not fake. Bitcoin is the only truly decentralised cryptocurrency, meaning it will not be captured by regulation or other actions of a nation state. In fact, it exists outside of the control of any country, making it the perfect money for the global economy. Finally, Bitcoin allows nations, organisations or individuals to take custody of their bitcoin (ie possession) such that only they can control it. There are sophisticated methods for ensuring that this is done securely, such as multi-signature accounts, to ensure that one individual cannot compromise a country’s bitcoin holdings.

So, what can we do about this? The Bank of International Settlements (BIS), effectively the central bank of the world, has published guidance stating that banks can hold up to 2% of capital in cryptocurrency. We therefore ask the RBA to hold 2% of assets in bitcoin. The earlier we do so, the more bitcoin Australia will own, and the better position we will be in as a country, ensuring our prosperity into the future.

If you agree, you can sign this petition: bitcoinpetition.me

Alternatively, write to your local member of parliament or contact the RBA directly and ask them to HODL bitcoin:

Phone 02 9551 8111

Email  rbainfo@rba.gov.au

Post    Reserve Bank of Australia, GPO Box 3947, Sydney, NSW 2001, Australia