Here’s a Future Where You Can Use the Yuan Instead of the DollarBy
The yuan is at its highest in more than a year, but China’s efforts to internationalize it remain in their infancy. AXA Framlington Asia’s Mark Tinker, however, has identified one area where it’ll provide an alternative to the dollar.
China’s pricing of assets in yuan -- coupled with the Hong Kong Stock Exchange’s plan to sell physical gold contracts priced in the currency -- will create a system where countries can sidestep the U.S. banking system, Tinker said in an Aug. 30 note.
“Having accepted payment for oil or gas in RMB, the seller, be it Russia or Saudi Arabia or anyone else for that matter, does not have to worry about having excess RMB, they can simply trade it back into gold,” Tinker said. “We are moving to a multipolar world.”
It’s still some way off though -- the yuan accounted for just 2 percent of Swift global payments in July.