Russian Banker Predicts Chinese Yuan to Surpass US Dollar as Global Reserve Currency

Russian Banker Predicts Chinese Yuan to Surpass US Dollar as Global Reserve Currency

According to the chairman of Russia’s second-largest bank, there are strong indications that the Chinese yuan will replace the US dollar as the world’s primary reserve currency. With the central bank of Russia already investing in yuan and a significant portion of trade settlements between Russia and China conducted in yuan, the shift could occur within the next decade.

Russian Banker Predicts Chinese Yuan to Surpass US Dollar as Global Reserve Currency

Russian Banker Foresees Chinese Yuan as Future Global Reserve Currency

During a recent Russian-Chinese business forum in Shanghai, Andrey Kostin, the chairman of VTB Bank, expressed his belief that the Chinese yuan will supersede the US dollar as the dominant global reserve and settlement currency within the next ten years.

Kostin was quoted by Sputnik stating, “China is now the world’s second-largest economy and will soon become the first.” He further highlighted:

There are compelling reasons to anticipate the Chinese yuan taking over the role of the world’s primary reserve and settlement currency in the coming decade.

Kostin pointed out that the central bank of Russia has already begun investing its reserves in yuan, and more than 70% of trade transactions between Russia and China are settled in yuan alongside the Russian ruble.

The chairman of VTB Bank explained that the existing monetary and financial system, which has been in place for decades, ensures the dominance of the US and its Western allies, with the US dollar and the euro accounting for three-quarters of global settlements. However, Kostin emphasized that the US has been employing the US dollar as a weapon, despite it being the world’s primary reserve currency.

In February, the US Treasury Department imposed “unprecedented” and “expansive” sanctions on VTB Bank and Sberbank, the two largest banks in Russia.

Russia and China have been actively strengthening their economic ties and promoting the use of their national currencies in trade transactions. In April, the Chinese yuan surpassed the US dollar as the most traded currency in Russia. This trend is expected to continue as both nations aim to reduce their reliance on the US dollar.

Numerous voices have cautioned against the weaponization of the US dollar, warning that it could lead to its loss of global reserve currency status. Many countries are now advocating for the use of national currencies to decrease their dependency on the US dollar. The BRICS economic bloc has been intensifying efforts to de-dollarize and has proposed a common currency. Additionally, ten Southeast Asian nations have agreed to promote the use of their national currencies, and high-ranking officials from nine Asian countries convened in Iran to discuss de-dollarization measures. However, the International Monetary Fund (IMF) does not foresee a rapid shift in USD reserves despite the escalating trend of de-dollarization.

Also Check: Belarus Aims to Strengthen Ties With BRICS, SCO, ASEAN for Enhanced Economic Integration

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