It’s literally happening right now. China-Russia will ditch dollar:
In 2015 90% of their bilateral transactions were conducted in dollars.
By Q1 2020 46% of their bilateral transactions were conducted in dollars.
They’ve been doing this since 2014.
Traditionally the dollar had the advantages of being able to maintain value in the form of limited inflation/depreciation and the size of the American domestic economy. Nowadays, the Inflation is no longer limited being at 40 year high and no longer considered transient. Meanwhile, China developed its domestic economy to a size that is now comparable to US.
China and Russia have an economic agreement in place that allows them to gain access to the other’s currency without having to purchase it on the foreign exchange market. This has been going on since 2014.
China and Russia have been settling all transactions between each other’s nations in native currency and develop systems independent of SWIFT by conducting trade in Roubles and Yuan since June 2019.
Russia has been rapidly accumulating yuan reserves at the expense of the dollar. In early 2019, Russia’s central bank revealed that it had slashed its dollar holdings by $101 billion – over half of its existing dollar assets.
One of the biggest beneficiaries of this move was the yuan, which saw its share of Russia’s foreign exchange reserves jump from 5% to 15% after the central bank invested $44 billion into the Chinese currency. As a result, Russia acquired 1/4 of the entire world’s yuan reserves. Russia’s sovereign wealth fund has also begun investing in yuan and Chinese state bonds.
The whole notion that the US dollar will always be the world’s reserve currency is based on old truths that are no longer representative of how the world works today.
It’s literally happening right now. China-Russia will ditch dollar:
Traditionally the dollar had the advantages of being able to maintain value in the form of limited inflation/depreciation and the size of the American domestic economy. Nowadays, the Inflation is no longer limited being at 40 year high and no longer considered transient. Meanwhile, China developed its domestic economy to a size that is now comparable to US.
China and Russia have an economic agreement in place that allows them to gain access to the other’s currency without having to purchase it on the foreign exchange market. This has been going on since 2014.
China and Russia have been settling all transactions between each other’s nations in native currency and develop systems independent of SWIFT by conducting trade in Roubles and Yuan since June 2019.
Russia has been rapidly accumulating yuan reserves at the expense of the dollar. In early 2019, Russia’s central bank revealed that it had slashed its dollar holdings by $101 billion – over half of its existing dollar assets.
One of the biggest beneficiaries of this move was the yuan, which saw its share of Russia’s foreign exchange reserves jump from 5% to 15% after the central bank invested $44 billion into the Chinese currency. As a result, Russia acquired 1/4 of the entire world’s yuan reserves. Russia’s sovereign wealth fund has also begun investing in yuan and Chinese state bonds.
The whole notion that the US dollar will always be the world’s reserve currency is based on old truths that are no longer representative of how the world works today.