Basel III and the Future of Global Finance
A Deep Dive into ITM Trading’s Insights
Introduction: The Hidden Shift in the Global Financial System
A silent but profound transformation is unfolding in the global financial system, yet most people remain unaware of its implications. Basel III, a regulatory framework designed to strengthen the banking sector, may not be just about financial stability—it could be laying the groundwork for a seismic monetary reset. Taylor Kenney of ITM Trading presents an in-depth analysis of Basel III’s impact on gold, global banking, and the future of money itself.
1. The Role of the Bank for International Settlements (BIS): The Power Behind Basel III
At the heart of Basel III regulations is the Bank for International Settlements (BIS), often referred to as the "central bank for central banks." Operating from Switzerland, the BIS exerts enormous influence over global banking policies, setting regulations that even impact financial institutions in the United States.
Kenney raises a critical question: Did the financial regulators genuinely fail to recognize the overleveraging of banks before the 2008 financial crisis? Or, instead, were these institutions knowingly complicit, only acting in the wake of economic collapse to serve their own interests?
Basel III’s origins stem from the failures of the Great Financial Crisis, yet its implementation suggests more than just a reactionary safeguard—it appears to be a strategic repositioning of global finance. With the BIS leading these regulatory changes, it is crucial to question whether these measures are genuinely aimed at stability or if they serve a deeper agenda, one that may shift financial power structures worldwide.
2. Basel III’s Gold Reclassification: A Game-Changer for Banking Reserves
One of the most significant yet underreported aspects of Basel III is the reclassification of gold from a Tier 3 asset to a Tier 1 asset. Historically, banks were required to discount gold’s value on their balance sheets, treating it as a risky asset. Now, gold enjoys the same status as cash and U.S. Treasury bonds, meaning banks can account for 100% of its value.
This shift fundamentally alters the role of gold in the financial system. Central banks, previously indifferent to fluctuations in gold prices, now stand to benefit significantly from rising gold values.
By elevating gold to the highest tier of financial assets, Basel III is reshaping the perception of gold’s role in the global economy. The move reduces reliance on paper assets and fiat currency, signaling a return to hard assets as a financial safety net. Given historical trends, this could indicate an impending transition to a gold-backed monetary system.
3. The Decline of Paper Gold: Basel III’s Crackdown on Market Manipulation
For decades, the gold market has been manipulated through paper contracts—gold ETFs and futures contracts that represent claims on gold but are not backed by actual physical reserves. Under Basel III, banks must hold physical gold rather than relying on these speculative instruments.
Kenney explains that major financial institutions, such as the London Metal Exchange (LME) and the London Bullion Market Association (LBMA), have been operating on a fractional reserve system similar to traditional banks. This has enabled massive paper gold trades that artificially suppress prices.
However, recent developments—such as the Bank of England’s inability to fulfill gold withdrawal requests—indicate that the system is unraveling in real-time.
The transition from paper gold to physical reserves marks a turning point in the financial system. As Basel III enforces stricter compliance, institutions dependent on paper gold may struggle, and gold prices could finally reflect true supply and demand. This could also trigger a liquidity squeeze, further accelerating gold’s ascent as a premier asset.
4. Central Banks’ Gold Buying Frenzy: A Shift Toward a New Monetary Order
Global central banks have been accumulating gold at record levels over the past three years. Kenney outlines three primary reasons for this strategic move:
Hedging Against Currency Instability – As global debt skyrockets and fiat currencies lose credibility, central banks are securing gold as a hedge against inflation and economic uncertainty.
The Rise of a Multipolar Currency System – Countries such as China and Russia, along with BRICS nations, are reducing their dependence on the U.S. dollar. Gold, being a neutral asset, provides a universally accepted alternative.
Preparation for a Monetary Reset – Every historical monetary transition has been underpinned by gold. As the fiat-based financial system deteriorates, central banks are securing gold in anticipation of the next global reset.
The aggressive gold accumulation by central banks signals that a shift is already underway. Whether this culminates in a return to a gold-backed monetary system or an alternative financial structure remains to be seen. However, those who fail to recognize and adapt to this change risk being left behind.
5. The U.S. Delay in Basel III Implementation: Buying Time or Strategic Resistance?
While most of the world has already begun transitioning under Basel III guidelines, the U.S. remains hesitant. The final phase of the framework was enacted on January 1, 2023, yet full compliance in the U.S. is delayed until 2028, with a transitionary period beginning July 1, 2025.
Kenney suggests two possible reasons for this delay:
The U.S. understands that once Basel III is fully implemented, the dollar will face direct competition from gold. As a fiat-based global reserve currency, the dollar’s dominance relies on confidence in debt-backed assets. If banks and governments begin treating gold as equivalent to cash, it could disrupt the dollar-centric system.
The U.S. may be stalling to buy time and develop a backup strategy, such as integrating gold into its own monetary framework. Recent statements from the U.S. Treasury Secretary about “monetizing the U.S. balance sheet” have sparked speculation that gold could play a critical role in future economic policies.
The U.S. is in a precarious position. On one hand, resisting Basel III could isolate it from the emerging financial order. On the other hand, full adoption could accelerate the dollar’s decline. The key takeaway is that a major shift is inevitable—the only question is whether the U.S. will lead the transition or scramble to adjust as it unfolds.
6. What This Means for Individuals: Preparing for the Financial Reset
Kenney emphasizes that Basel III is not just another banking regulation—it is a fundamental shift that will redefine global finance. She urges individuals to observe the actions of central banks and follow their lead by securing physical gold.
She highlights three key takeaways for individuals:
Pay attention to elite financial players – If central banks are stockpiling gold, it is not a coincidence.
Gold supply will tighten – As demand increases, today’s gold prices may be considered “cheap” in hindsight.
Wealth preservation and opportunity – Those who prepare now will not only protect their assets but could also benefit from the transition when gold revaluation occurs.
This is a moment of both risk and opportunity. The traditional fiat system is under pressure, and those who adapt to the changing landscape will be better positioned for the future. Gold, long dismissed as a relic, is proving once again to be a cornerstone of financial stability.
Conclusion: A Historic Financial Transformation in Motion
Basel III is more than just a regulatory update—it is a roadmap for the next phase of global finance. As governments and financial institutions realign their priorities around gold, individuals must take steps to secure their own financial future.
Kenney’s message is clear: Don’t listen to what governments and banks say—watch what they do. The shift is happening, and those who recognize it now will be the ones who thrive in the new monetary order.