According to geopolitical researcher Brian Berletic, US Treasury Secretary Janet Yellen recently declared that the dollar has no major rivals in the globe, but that assertion could be “wishful thinking” on Washington’s behalf. On the contrary, US sanctions on Russia could speed up dedollarisation and help the rise of Yuan.
He notes out that, notwithstanding its authority, the White House’s current activities have spurred nations all around the globe to seek alternate solutions. Options do exist, most notably in the shape of the euro and the yuan, according to Fabio Massimo Parenti, associate professor of international political economy and global studies at the Italian International Institute Lorenzo de’Medici.
He recognizes that the dollar stays the world’s most important currency, but notes that its importance has waned in recent times. Simultaneously, the Chinese yuan has surpassed the US dollar as the world’s fourth most widely circulated currency.
The so-called movement of de-dollarization – countries’ deliberate rejection to utilize the dollar in bilateral dealings – has resulted in a drop in the dollar’s value. Although the reserve currency provides some stability and security, it has become increasingly connected with the threat of sanctions, which the United States has already been throwing on nations all over the globe — Russia, Iran, Venezuela, and so on.
Though countries such as China and Russia have begun to abandon the dollar, Francesco Sisci, a Beijing-based China specialist, author, and columnist, points out that this does not necessarily make their currencies possible substitutes for the dollar. The same may be said about the euro and even gold, according to the expert.
According to Sisci, the topic of how much Washington’s actions have harmed the dollar’s global hegemony in recent years is still unresolved. On the one hand, the US possessed roughly half of global wealth at the conclusion of WWII, and money was a factor in the decision to use the greenback as the reserve currency, according to the experts. The United States now counts for only 20% of global wealth, but its friends, who deal in dollars, account for 60% to 70% of worldwide wealth.
Yuan’s Global Role in Beijing’s Hands
The press has already been warning for decades that the dollar will lose its reserve currency position, but the very first moves in this regard have only recently surfaced as the de-dollarization “movement” developed. This trend will intensify now that the United States has imposed hefty sanctions against Russia, according to Fabio Massimo Parenti.
He reminds out that China currently conducts commerce in the yuan with a number of partners, progressively shifting away from the dollar, and also that geopolitical issues will only hasten the transition.
According to geopolitical researcher Brian Berletic, the dollar’s appeal stemmed from the United States’ unrivalled economic supremacy, but now that China has risen to threaten it, the yuan has a chance to threaten the greenback’s dominance. Berletic added that Washington’s exploitation of the dollar’s special status only aids the process.
While Russia and China have begun a de-dollarization procedure, it is still in its “infancy,” according to Srikanth Kondapalli, a professor of Chinese studies at New Delhi’s Jawaharlal Nehru University. He reminds out that their annual bilateral trade is barely $140 billion, but the US-China goods exchange (in dollars) was approximately $730 billion the year before.
The professor also points out that, despite public bluster, Beijing is not in a hurry to abandon the dollar entirely.
According to China analyst Francesco Sisci, for the yuan to become a major global financial powerhouse, Beijing must first adopt specific actions to promote this. There has been much conjecture that China will employ a virtual renminbi to extend its currency outside of the country.
Beijing, nonetheless, should develop globally recognized, autonomous, and powerful financial markets in addition to establishing a readily available currency, according to Sisci.
These markets must likewise follow clear standards and be populated by transparent businesses, according to the expert.
Is the Dollar’s Dominance Doomed or Will the Greenback Remain Forever?
Experts and economists in China differ in their assessments of the dollar’s fate and the yuan’s possibilities, but the majority concur that the greenback’s standing will be weakened.
Fabio Massimo Parenti, a professor of political economy, pointed out that the global economy is already highly regionalized, with several countries having their own currencies. He predicts that the dollar will eventually lose its hegemony as the predominant currency.
According to China analyst Francesco Sisci, commerce in the yuan and gold barter can hurt the dollar but just not fully overthrow it. The expert stated that, similar to the Cold War era, the globe could be divided into two financial systems, but he believes the dollar’s supremacy will be contested by the yuan.
Brian Berletic is more bullish about the yuan’s potential, believing that it would eventually displace the dollar unless Washington succeeds in halting China’s emergence as an economic power, which it has been concerned about for years.
Everything hinges on other nations understanding that what the US is doing to Russia might just as readily be done to them, according to the geopolitical analyst.
The following statement (from the 3rd paragraph) is factually incorrect;
“the Chinese yuan has surpassed the US dollar as the world’s fourth most widely circulated currency.”
The US$ is still the world’s most widely circulated currency, and the Yuan isn’t 4th either. The 6 most widely circulated currencies are;
Please see here for more; https://www.investopedia.com/articles/forex/11/popular-currencies-and-why-theyre-traded.asp
EXCELLENT RESOURCING , maranathasoon – – way to go. …… …. shalom, al jenkins