Treasury Secretary Scott Bessent told the Senate Banking Committee he “would not be surprised” if China was building digital assets potentially backed by gold rather than the yuan, given China’s large sandbox in Hong Kong.
The Gold-Backed Digital Asset Rumors
Senator Cynthia Lummis (R-Wyo.) asked Bessent directly whether China is using digital assets and blockchain to build an alternative to American financial dominance.
Bessent responded, saying, “We don’t know that for sure. There are lots of rumors that China may be developing digital assets backed by something other than the RMB, perhaps gold-based. We haven’t seen that.”
He added a caveat: “But they have a very large sandbox in Hong Kong. And HKMA is actively traveling the world looking at different mechanisms. So I would not be surprised.”
The Hong Kong Testing Ground
The Hong Kong Monetary Authority serves as China’s testing ground for financial innovations without directly implicating mainland authorities.
By operating through Hong Kong, China can experiment with digital asset structures while maintaining plausible deniability.
A gold-backed digital asset would compete directly with the dollar’s reserve currency status by offering a stable store of value not subject to U.S. monetary policy or sanctions.
This differs from China’s existing digital yuan, which remains tied to the RMB.
Bessent’s comments come as gold recently hit record highs above $5,600 per ounce before a sharp correction, and as crypto markets struggle with regulatory uncertainty in the U.S.
Other Key Testimony
Bessent addressed other topics beyond Chinese digital assets, saying Iranian leaders are moving money out “like crazy”—a sign that “the end may be near” for the current regime. He described it as “the rats are leaving the ship.”
Bessent also emphasized the importance of passing the Clarity Act, acknowledging that applying capital gains tax on cryptocurrency is complex.
Image: Shutterstock
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