The greatest advantage of physical gold lies in its dual nature as a natural currency and its good liquidity and anonymity; the current focus is on tightening control over its anonymity.



The liquidity of physical gold goes without saying, as it can easily facilitate large transactions and exchanges with a very small volume.
The anonymity of physical gold is actually easy to understand, because physical gold does not have serial numbers like cash, nor does online trading leave traces, and gold can also be split or re-melted at any time. Therefore, once a piece of physical gold is traded, it is quite difficult to trace back, and there is fundamentally no way to lock in its next transaction.

So we see that the content specified in this new regulation actually adds a 'cash' condition, which is 'cash purchases of gold exceeding 100,000 must be reported'. The key point is that transactions based on legal tender are traceable.
Thus, this new regulation is not an isolated measure, but part of a systematic crackdown.

In fact, with the continuous strengthening of various measures under the guise of anti-fraud in recent years, the traceability of legal tender transactions has become increasingly strong. First, the difficulty of obtaining physical currency has become quite large; merely 'registering for large cash withdrawals' and 'setting ATM withdrawal limits' can greatly restrict withdrawal behaviors, making it much easier to identify the remaining fewer withdrawal actions. The limit on non-counter transfers follows the same principle, so I won't elaborate further.

After all, the vast majority of transactions are still conducted through legal tender, and the price of gold in legal tender is always fluctuating, making it even more challenging to find another general equivalent for gold transactions. A regulatory net targeting legal tender has already been established, and conditions are ripe, which is why new regulations concerning the anonymity of physical gold transactions can now be issued.

In other words, controlling legal tender effectively controls the anonymity of gold.

Globally, the level of regulation on precious metal transactions is becoming increasingly strict, and in domestic centers like Shenzhen, gold trading has been under stricter supervision since last year, requiring real-name registration for transactions above a certain amount. The new regulation is not entirely a new thing; it is merely an expansion of real-name registration supervision on a larger scale.

The new regulations mention that strengthening the supervision of gold transactions is for anti-money laundering purposes. In fact, money laundering does not necessarily require the attributes of a 'general equivalent'; very obvious 'non-standard goods' like artworks, luxury goods, and antiques are often used in money laundering crimes.

Of course, we are not denying that some criminals do use the anonymity of physical gold for money laundering, but we should also note that the anonymity of physical gold can actually be used for tax evasion. This part of the demand is a necessary 'general equivalent' and cannot shift to non-standard goods—this is actually another layer of meaning behind strengthening the regulation of gold transactions that has not been explicitly stated.

Therefore, the demand for anonymity concerning physical gold will only be suppressed by the new regulations, rather than disappearing entirely. Thus, before the new regulations are fully implemented, there will be a wave of purchasing demand to get ahead, and the selling behaviors associated with these purchases will create a relatively short tail effect; in the long term, what kind of alternatives will exist that can provide (relative) anonymity, possess monetary attributes, and also have good liquidity?

With that said, I believe everyone is increasingly aware of the value of BTC!