Home Bitcoin Gold Fungibility Faces Scrutiny – Bitcoin Journal

Gold Fungibility Faces Scrutiny – Bitcoin Journal

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At the 48th annual Group of Seven (G7) summit, held June 26 – June 28, 2022, in the Bavarian Alps of Germany at the stunning Schloss Elmau, President Joe Biden stated that the United States and three other G7 members will seek to ban importing newly refined or mined Russian gold. The ban follows a string of sanctions that have sought to economically damage Russia in retaliation against their 2022 invasion of Ukraine. Of note:

  • The United States is accompanied by fellow members of the G7 (Canada, Japan, and the U.K.) in taking action against importing gold of Russian Federation origin.
  • The U.S. Department of the Treasury has “determined that the prohibitions of section 1(a)(i) of E.O. 14068 shall apply to gold of Russian Federation origin, with immediate effect.”
  • This prohibition does not apply to Russian gold that was located outside of Russia prior to the day of the ban’s implementation.
  • The U.K. government released a formal statement banning the import of Russian gold to serve as “tough new measures” against Putin’s escalation of the Russo-Ukrainian War. The U.K. was the largest importer of Russian gold, accounting for about $16.6 billion (£13.5 billion) worth of gold now anticipated to be affected by the ban.
  • The London Bullion Market Association, an international trade association representing the global over-the-counter (OTC) precious metal bullion market, has acknowledged the announcements from the participating G7 nations and will coordinate with the sanctions accordingly.
  • Russian oligarchs are primary targets for a ban on gold as Western sanctions endeavor to amplify punishments against Russia’s wealthy elite. Sanctions have caused the loss of tens of billions of dollars in their collective net worth with foreign nations confiscating Russian assets ranging from superyachts to real estate.
  • The ban comes at a time when Russia recently defaulted on its foreign debt obligations for the first time since the Bolshevik Revolution when the Bolshevik government rejected all sovereign debt and other financial obligations—costing foreign investors millions of pounds in lost Russian investments.



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