The US dollar is growing weaker by the day, and there’s no denying the fact that this sentiment is taking a toll on global investors. The fact that the dollar is now entering into a downward spiral, battered heavily by forces such as rising US debt and fierce tariff hikes, has now put the USD in grave trouble. In this wake, China has floated a new idea, a notion that banks on the emerging multipolar currency order, stating how the nations should now support the idea of having multiple currencies for trade rather than relying on a singular currency order.
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China Backs the Multipolar Currency System
China’s central bank chief, Pan Gongsheng, has introduced a new idea, a notion of a multipolar currency world where alternatives to the US dollar exist in utter peace. Gongsheng, in his latest analysis, openly called for a new international monetary order. Underlining the specifics, Gongsheng stated how this new order will comprise a system where “sovereign currencies coexist and compete with checks and balances,” per WSJ.
Gongsheng was also quite vocal about depending on a singular currency order that has dominated the world for decades. Speaking about USD, he stated how such orders often fall prey to weaponization at times of geopolitical uncertainty and tensions.
“Traditional cross-border payment infrastructures can be easily politicized, weaponized, and used as unilateral sanction instruments,” Gongsheng said.
The dollar at the moment is marred with economic loopholes, as rising US debt metrics and credibility risks deem the currency non-feasible for nations to work with.
China Banks for Chinese Yuan?
Gongsheng later shared his stance on Yuan, adding how it’s time for nations to consider capable USD alternatives like Yuan for future trading and investments.
“There is 1750769115 a window of opportunity where other countries look for dollar alternatives as well, which makes it easier for China to convince countries to have more of the bilateral transactions with China in the Chinese currency rather than the USD,” Gongsheng stated.
A new perspective also outlined how China is not banking on the Chinese yuan to become the new reserve currency. Instead, the nation wants to “move away” from a risk asset like the dollar as geopolitical tensions continue to escalate and batter the USD.
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