Treasury Chief Warns China May Be Testing Gold-Backed Digital Assets — U.S. on Alert

Headline: Treasury chief says China could be experimenting with gold-backed digital assets — and Washington is watching

At a Senate Banking Committee hearing Thursday, Treasury Secretary Scott Bessent told lawmakers he wouldn’t be surprised if China is developing blockchain-based digital assets backed by something other than the yuan — possibly gold — though he stressed there’s no confirmed evidence so far.

Asked directly by Sen. Cynthia Lummis (R‑Wyo.) whether China might be building a blockchain rival to U.S. financial dominance, Bessent replied: “I would not be surprised. 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.”

Why gold matters
A digital asset pegged to gold could present a different threat than China’s existing digital yuan. Because a gold‑backed token could function as a stable store of value and would not be tied to U.S. monetary policy or vulnerable to U.S. sanctions in the same way as dollar‑denominated instruments, it could complicate the dollar’s role as the world’s primary reserve currency.

Bessent also noted Hong Kong’s role as a sort of “sandbox” where Beijing can trial new financial products with less direct mainland oversight — a setting that could make covert experimentation easier.

Other takes from the hearing
On Iran, Bessent said authorities there appear to be moving money out “like crazy,” an observation he said could signal that “the end may be near” for the current regime — a comment he punctuated with the metaphor “the rats leaving the ship.”

On domestic policy, Bessent urged Congress to pass the Clarity Act, citing the tangled state of crypto taxation in the U.S. and the practical difficulties of applying capital‑gains rules to digital assets. He framed clearer legislation as a necessary step to reduce uncertainty for markets and taxpayers.

Bottom line
Bessent’s comments don’t confirm a gold‑backed Chinese digital asset, but they underscore an increasing Treasury focus on how foreign innovation in digital currencies might affect global finance and the dollar’s dominance. For crypto markets and policymakers alike, the key items to watch are any developments out of Hong Kong, Beijing’s public or private moves on alternative digital reserves, and whether U.S. lawmakers move to streamline crypto tax rules.

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