In an era dominated by cryptocurrencies and digital transactions, the debate over Germany’s physical gold reserves might seem like a throwback to a bygone age. Yet, for many economists, the physical nature of gold is exactly why its location matters so much. As Germany weighs whether to bring back €164 billion in bullion from New York, the conversation is highlighting the enduring value of tangible assets.
Germany holds the second-largest gold reserve in the world, with a total value of nearly €450 billion. While much of the world’s wealth exists as bits and bytes, these 3,350 tonnes of gold provide a physical foundation for the German economy. The fact that 1,236 tonnes of this foundation are stored in the U.S. is increasingly seen as a strategic risk in an era of digital warfare and cyber threats.
Emanuel Mönch has argued that in the event of a catastrophic digital failure or a massive cyber-attack on the banking system, physical gold would be the ultimate “reset button.” He suggests that for this reset to work, the gold must be physically accessible to the German government. For Mönch, bringing the gold home is a way to “air-gap” Germany’s most valuable asset from global digital risks.
This perspective has gained traction among those who are skeptical of the long-term stability of the global digital infrastructure. They argue that while digital finance is efficient, it is also vulnerable. Physical gold held in domestic vaults represents a “fail-safe” that cannot be hacked or deleted by a foreign power or a group of cyber-criminals.
Despite these digital-age concerns, the German government remains confident in its current storage model. Officials point out that the gold is audited and tracked with the most advanced technology available. They argue that the physical location of the gold is less important than the legal and digital systems that guarantee its ownership, which they claim are as secure as ever.
