Bank of China Completes First Cross-Border Precious Gold Transaction With Digital Yuan
The Bank of China's Shanghai branch has made history by successfully completing the first settlement of precious metals using the digital yuan. This groundbreaking transaction took place on December 19 and involved the Shanghai Gold Exchange closing a $14 million precious metal trade after receiving funds from overseas. The use of the digital yuan for this settlement marks a significant milestone in the adoption of China's central bank digital currency (CBDC).
Collaboration with Shanghai Gold Exchange
The Bank of China's Shanghai branch worked closely with the Shanghai Gold Exchange to facilitate this landmark transaction. By transacting the funds received from overseas using the digital yuan, the bank demonstrated the potential of this innovative digital currency in the precious metals market. In exchange for undisclosed precious metals, $14 million was paid using the digital yuan.
According to local media reports, this is the first time that the Chinese digital yuan has been used to complete a transaction involving fine metals. A spokesperson for the Bank of China's Shanghai branch emphasized the importance of this trade in establishing Shanghai as an international financial hub. They stated that this account would contribute to the financial strength needed to support the implementation of the free trade pilot zone promotion strategy in Shanghai and enhance the quality and upgrading of the international trade center.
Continued Adoption of Digital Yuan
This achievement by the Bank of China's Shanghai branch is the second milestone reached using the digital yuan this month. Previously, on December 14, the bank facilitated a transaction between its Shanghai and Hong Kong branches. This transaction involved Baosteel Group, a steel and iron company, and Bao-trans Enterprises, a manufacturer of premium steel products, and amounted to a $3.4 million payment for imported iron ore. This marked the debut of the digital yuan in the commodities arena.
In addition to these accomplishments, China is actively working towards introducing international digital yuan retail payments. The country recently announced a partnership with the Monetary Authority of Singapore (MAS) to implement a pilot program that will allow tourists to use the digital yuan for tourism purposes in both countries. This initiative further demonstrates China's commitment to promoting the use of the digital yuan on a global scale.
Have Your Say
What are your thoughts on using the digital yuan for settlements involving precious metals? We would love to hear your opinions in the comments section below.
Frequently Asked Questions
Should You Open a Precious Metal IRA?
Before opening an IRA, it is important to understand that precious metals aren't covered by insurance. There are no ways to recover the money you lost in an investment. This includes investments that have been damaged by fire, flooding, theft, and so on.
Protect yourself against this type of loss by investing in physical gold or silver coins. These items can be lost because they have real value and have been around for thousands years. These items are worth more today than they were when first produced.
Choose a reputable company with competitive rates and quality products if you are looking to open an IRA. You should also consider using a third party custodian to protect your assets and give you access at any time.
You won't get any returns until you retire if you open an account. Keep your eyes open for the future.
Should You Get Gold?
In times past, gold was considered a safe haven for investors in times of economic trouble. Many people are now turning their backs on traditional investments like stocks and bonds, and instead look to precious metals like Gold.
While gold prices have been rising in recent years they are still low relative to other commodities, such as silver and oil.
This could be changing, according to some experts. According to them, gold prices could soar if there is another financial crisis.
They also pointed out that gold is gaining popularity due to its perceived value, and potential return.
These are some important things to remember if your goal is to invest in gold.
- The first thing to do is assess whether you actually need the money you're putting aside for retirement. You can save money for retirement even if you don't invest in gold. However, when you retire at age 65, gold can provide additional protection.
- Second, make sure you understand what you're getting yourself into before you start buying gold.There are several different types of gold IRA accounts available. Each type offers varying levels and levels of security.
- Remember that gold is not as safe as a bank account. If you lose your gold coins, you may never recover them.
So, if you're thinking about buying gold, make sure you do your research first. And if you already own gold, ensure you're doing everything possible to protect it.
Can I hold a gold ETF in a Roth IRA?
This option may not be available in a 401(k), but you should look into other options such as an Individual Retirement account (IRA).
Traditional IRAs allow for contributions from both employees and employers. A Employee Stock Ownership Plan, or ESOP, is another way to invest publicly traded companies.
An ESOP gives employees tax advantages as they share the stock of the company and the profits it makes. The money invested in ESOPs is taxed at a lower rate that if it were owned directly by an employee.
Also available is an Individual Retirement Annuity. An IRA allows for you to make regular income payments during your life. Contributions to IRAs don't have to be taxable
How much should I contribute to my Roth IRA account?
Roth IRAs can be used to save taxes on your retirement funds. These accounts cannot be withdrawn until you turn 59 1/2. However, if your goal is to withdraw funds before that time, there are certain rules you must observe. First, your principal (the original deposit amount) cannot be touched. This means that no matter how much you contribute, you can never take out more than what was initially contributed to this account. You must pay taxes on the difference if you want to take out more than what you initially contributed.
The second rule states that income taxes must be paid before you can withdraw earnings. So, when you withdraw, you'll pay taxes on those earnings. Consider, for instance, that you contribute $5,000 per year to your Roth IRA. Let's say you earn $10,000 each year after contributing. On the earnings, you would be responsible for $3,500 federal income taxes. The remaining $6,500 is yours. This is the maximum amount you can withdraw because you are limited to what you initially contributed.
The $4,000 you take out of your earnings would be subject to taxes. You'd still owe $1,500 in taxes. In addition, 50% of your earnings will be subject to tax again (half of 40%). Even though you had $7,000 in your Roth IRA account, you only received $4,000.
There are two types: Roth IRAs that are traditional and Roth. A traditional IRA allows for you to deduct pretax contributions of your taxable income. Your traditional IRA can be used to withdraw your balance and interest when you are retired. There is no limit on how much you can withdraw from a traditional IRA.
Roth IRAs do not allow you to deduct your contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. There is no minimum withdrawal limit, unlike traditional IRAs. You don’t have to wait for your turn 70 1/2 years before you can withdraw your contributions.
Is gold a good investment IRA?
Gold is an excellent investment for any person who wants to save money. You can diversify your portfolio with gold. But gold is not all that it seems.
It has been used throughout history as currency and it is still a very popular method of payment. It's often referred to as “the world's oldest currency.”
Gold is not created by governments, but it is extracted from the earth. Because it is rare and difficult to make, it is extremely valuable.
The price of gold fluctuates based on supply and demand. The strength of the economy means people spend more, and so, there is less demand for gold. Gold's value rises as a result.
On the flipside, people may save cash rather than spend it when the economy slows. This leads to more gold being produced which decreases its value.
This is why both individuals as well as businesses can benefit from investing in gold. You'll reap the benefits of investing in gold when the economy grows.
You'll also earn interest on your investments, which helps you grow your wealth. You won't lose your money if gold prices drop.
What Precious Metals Can You Invest in for Retirement?
Gold and silver are the best precious metal investments. They are both simple to purchase and sell, and they have been around for a long time. They are a great way to diversify your portfolio.
Gold: One of the oldest forms of currency, gold, is one of mankind's most valuable. It's stable and safe. This makes it a good option to preserve wealth in uncertain times.
Silver: The popularity of silver has always been a concern for investors. It's a good choice for those who want to avoid volatility. Silver tends to move up, not down, unlike gold.
Platinum: A new form of precious metal, platinum is growing in popularity. It's durable and resists corrosion, just like gold and silver. It is however more expensive than its counterparts.
Rhodium. Rhodium is used as a catalyst. It's also used in jewelry making. It is also quite affordable compared with other types of precious metals.
Palladium: Palladium, which is a form of platinum, is less common than platinum. It is also cheaper. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
Statistics
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
External Links
irs.gov
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
forbes.com
law.cornell.edu
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement account
How To
3 Ways To Invest in Gold For Retirement
It is important to understand the role of gold in your retirement plan. If you have a 401(k) account at work, there are several ways you can invest in gold. You might also be interested to invest in gold outside the workplace. A custodial account can be opened by a brokerage firm like Fidelity Investments if you already have an IRA. Or, if you don't already own any precious metals, you may want to consider buying them directly from a reputable dealer.
These are three easy rules to remember if you invest in gold.
- Buy Gold With Your Cash – Do not use credit cards to purchase gold. Instead, cash in your accounts. This will help protect you against inflation and keep your purchasing power high.
- Physical Gold Coins – Physical gold coins are better than a paper certificate. Physical gold coins can be sold much faster than paper certificates. You don't have to store physical gold coins.
- Diversify Your Portfolio. Never place all your eggs in the same basket. By investing in multiple assets, you can spread your wealth. This can reduce market volatility and help you be more flexible.
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By: Sergio Goschenko
Title: Bank of China Completes First Precious Metal Digital Yuan Settlement
Sourced From: news.bitcoin.com/bank-of-china-completes-first-precious-metal-digital-yuan-settlement/
Published Date: Fri, 22 Dec 2023 03:30:26 +0000
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