Chinese Yuan Beats Euro To Become the Second Most Used Currency

[Beijingwalker]

Chinese Yuan Beats Euro To Become the Second Most Used Currency​

Vinod Dsouza
September 1, 2024

The Chinese yuan is surging rapidly in trade settlements elbowing the Euro to become the second most used currency. BRICS member China is advancing in toppling the Euro making the Chinese yuan take the spot below the US dollar. The Xi Jinping administration is aggressive in pushing its native currency on the global stage making several developing countries settle trade payments in it.

While recent data from Bloomberg shows that the Chinese yuan outperformed the Euro in April 2024, it reclaimed the share again in June. The latest data from the payment messaging system SWIFT highlights that the Chinese yuan approached nearly 6% in April 2024. Trade payments in the Chinese yuan increased by 13.37% in June retaining the second place only below the US dollar. The development comes at a time when BRICS is looking to dim the lights on the US dollar and the Euro and make the Chinese yuan and other local currencies supreme.

Chinese Yuan Overpowering the Euro​

The internationalization of the Chinese yuan comes after the US pressed sanctions on Russia in February 2022 for invading Ukraine. BRICS country China took advantage of the situation pushing the de-dollarization agenda and the Chinese yuan across the globe. De-dollarization is a broader web that also targets the Euro, Pound, and other leading Western currencies. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.

The internationalization of the Chinese yuan comes after the US pressed sanctions on Russia in February 2022 for invading Ukraine. BRICS country China took advantage of the situation pushing the de-dollarization agenda and the Chinese yuan across the globe. De-dollarization is a broader web that also targets the Euro, Pound, and other leading Western currencies. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.

Even the US Treasury Secretary Janet Yellen confirmed that the sanctions are what led to BRICS initiating de-dollarization. China is convincing several developing countries to cut ties with the US dollar and settle trade in local currencies. The Communist country is also pushing the Chinese yuan as the first payment option with its BRICS counterparts. The threat to the US dollar and Euro from BRICS member China is looming while the Chinese yuan aims to take the top spot.

 

[Beijingwalker]

If US loses its global dollar domination, it will become a developing nation overnight.

 

[muhammed45]

If US loses its global dollar domination, it will become a developing nation overnight.

They still have printing machines in their backyards working non stop. Rednecks print dollar out of thin air. Even in Afghanistan they had a printing machine used to print Afghani-dollar.

To remove this colonial cancer from global transactions, a great alliance between countries is needed.

 

[DoTell]

If US loses its global dollar domination, it will become a developing nation overnight.

But they still can call you a thief, a cheat, a threat, a bully, and deploy missiles and send warships to your door steps. They'll still lecture you on freedom

Oh "The significance of passage of time ..."
-- Deep thoughts by Kamala Harris

 

[Beijingwalker]

They still have printing machines in their backyards working non stop. Rednecks print dollar out of thin air. Even in Afghanistan they had a printing machine used to print Afghani-dollar.

To remove this colonial cancer from global transactions, a great alliance between countries is needed.

Every country can print money, not every country can produce goods, without goods, money is meaningless.

 

[muhammed45]

Every country can print money, not every country can produce goods, without goods, money is meaningless.

True that every country can print money out of thin air. But not every country can export the inflation of that printed money to every country around the world through global transaction mechnisms such as SWIFT etc. When you make dollar your reserve currency, you actually buy that inflation.

For example imagine Iran prints 2X of existing money, what can we do with its eventual inflation?

USA has enslaved all of us, even Chinese hardworking workers are working in the same direction of enabling dollar dominance. Its an economical chain around our necks that we willingly accepted.

The only solution to Your propoosal is dropping the dollar based system.

 

[Beijingwalker]

True that every country can print money out of thin air. But not every country can export the inflation of that printed money to every country around the world through global transaction mechnisms such as SWIFT etc. When you make dollar your reserve currency, you actually buy that inflation.

For example imagine Iran prints 2X of existing money, what can we do with its eventual inflation?

USA has enslaved all of us, even Chinese hardworking workers are working in the same direction of enabling dollar dominance. Its an economical chain around our necks that we willingly accepted.

The only solution to Your propoosal is dropping the dollar based system.

Pros and cons, China is also taking advantage of their system to hollow out their industries and decimate their manufacturing capabilities and then comes in for the kill.
Now we can have a free hand to start the process of establishing a new system to replace theirs.

 

[samejjangir]

True that every country can print money out of thin air. But not every country can export the inflation of that printed money to every country around the world through global transaction mechnisms such as SWIFT etc. When you make dollar your reserve currency, you actually buy that inflation.

For example imagine Iran prints 2X of existing money, what can we do with its eventual inflation?

USA has enslaved all of us, even Chinese hardworking workers are working in the same direction of enabling dollar dominance. Its an economical chain around our necks that we willingly accepted.

The only solution to Your propoosal is dropping the dollar based system.

USA can still build up its industry if it decides to cut military spending. But then NATO, EU etc will all fall. China is taking advantage by exporting cheap goods to eliminate USA industries & hence eliminate USA industrial capacity beyond a point of salvation. Once that happens, China can do anything & USA won't be able to do anything

 

[Beijingwalker]

China may leave some cheap manufacturing to the west and only focus on value added high tech products manufacturing like machines, cars, trains, computers, cellphones, ships in the future.

 

[LeGenD]

Speculators up to making claims once again.

Below is data from IMF:

https://data.imf.org/?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4

Euro remains at 2nd spot in Foreign Exchange Reserves around the world and no currency is close to surpassing it in this matter.

One nontraditional reserve currency gaining market share is the Chinese renminbi, whose gains match a quarter of the decline in the dollar’s share. The Chinese government has been advancing policies on multiple fronts to promote renminbi internationalization, including the development of a cross-border payment system, the extension of swap lines, and piloting a central bank digital currency. It is thus interesting to note that renminbi internationalization, at least as measured by the currency’s reserve share, shows signs of stalling out. The most recent data do not show a further increase in the renminbi’s currency share: some observers may suspect that depreciation of the renminbi exchange rate in recent quarters has disguised increases in renminbi reserve holdings. However, even adjusting for exchange rate changes confirms that the renminbi share of reserves has declined since 2022.

Dollar Dominance in the International Reserve System: An Update

The US dollar continues to cede ground to nontraditional currencies in global foreign exchange reserves, but it remains the preeminent reserve currency

www.imf.org

 

[j_hungary]

Below is data from IMF:

https://data.imf.org/?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4

Euro remains at 2nd spot in Foreign Exchange Reserves around the world and no currency is close to surpassing it in this matter.

One nontraditional reserve currency gaining market share is the Chinese renminbi, whose gains match a quarter of the decline in the dollar’s share. The Chinese government has been advancing policies on multiple fronts to promote renminbi internationalization, including the development of a cross-border payment system, the extension of swap lines, and piloting a central bank digital currency. It is thus interesting to note that renminbi internationalization, at least as measured by the currency’s reserve share, shows signs of stalling out. The most recent data do not show a further increase in the renminbi’s currency share: some observers may suspect that depreciation of the renminbi exchange rate in recent quarters has disguised increases in renminbi reserve holdings. However, even adjusting for exchange rate changes confirms that the renminbi share of reserves has declined since 2022.

Dollar Dominance in the International Reserve System: An Update

The US dollar continues to cede ground to nontraditional currencies in global foreign exchange reserves, but it remains the preeminent reserve currency

www.imf.org

That's because someone ALWAYS forgot that it doesn't matter if trade were conducted in Yuan, as long as those country that have a direct trade deal with China don't use Yuan as legal tender, they will have to exchange it from Yuan to their own currency somehow. That's why Currency Reserve is WAY, WAY more important to settlement currency. Because that's how Forex is for.

 

[LeGenD]

They still have printing machines in their backyards working non stop. Rednecks print dollar out of thin air. Even in Afghanistan they had a printing machine used to print Afghani-dollar.

To remove this colonial cancer from global transactions, a great alliance between countries is needed.

It cannot be done just like that. The US provides goods and services that have no substitute in the world and these can only be availed by using USD. China also benefit from these transactions because it is involved in manufacturing of a large number of American goods.

Always study IMF data and reports, these are most reliable. Speculators will continue to make claims for various reasons because they want you to invest in their schemes and scams.

 

[Beijingwalker]

Speculators up to making claims once again.

Below is data from IMF:

https://data.imf.org/?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4

Euro remains at 2nd spot in Foreign Exchange Reserves around the world and no currency is close to surpassing it in this matter.

One nontraditional reserve currency gaining market share is the Chinese renminbi, whose gains match a quarter of the decline in the dollar’s share. The Chinese government has been advancing policies on multiple fronts to promote renminbi internationalization, including the development of a cross-border payment system, the extension of swap lines, and piloting a central bank digital currency. It is thus interesting to note that renminbi internationalization, at least as measured by the currency’s reserve share, shows signs of stalling out. The most recent data do not show a further increase in the renminbi’s currency share: some observers may suspect that depreciation of the renminbi exchange rate in recent quarters has disguised increases in renminbi reserve holdings. However, even adjusting for exchange rate changes confirms that the renminbi share of reserves has declined since 2022.

Dollar Dominance in the International Reserve System: An Update

The US dollar continues to cede ground to nontraditional currencies in global foreign exchange reserves, but it remains the preeminent reserve currency

www.imf.org

Also reported by China Daily, the Chinese government mouthpiece

"While the RMB overtook the euro to become the second-largest global currency in the trade finance market in June, with a market share of 5.99 percent, its share further grew to 6 percent in July, helping the Chinese currency retain second place, behind only the US dollar, said SWIFT."

More internationalized yuan a growing reality

While the renminbi's internationalization has been advancing steadily amid the completion of related institutional arrangements and rising international investor interest in yuan-based assets, continued efforts can be made to facilitate the development of the offshore RMB market so that the...

global.chinadaily.com.cn

 

[Beijingwalker]

It cannot be done just like that. The US provides goods and services that have no substitute in the world

Like what?

 

[LeGenD]

Also reported by China Daily, the Chinese government mouthpiece

"While the RMB overtook the euro to become the second-largest global currency in the trade finance market in June, with a market share of 5.99 percent, its share further grew to 6 percent in July, helping the Chinese currency retain second place, behind only the US dollar, said SWIFT."

More internationalized yuan a growing reality

While the renminbi's internationalization has been advancing steadily amid the completion of related institutional arrangements and rising international investor interest in yuan-based assets, continued efforts can be made to facilitate the development of the offshore RMB market so that the...

global.chinadaily.com.cn

Yes, but IMF has pointed out the bigger picture that I have posted already.

One nontraditional reserve currency gaining market share is the Chinese renminbi, whose gains match a quarter of the decline in the dollar’s share. The Chinese government has been advancing policies on multiple fronts to promote renminbi internationalization, including the development of a cross-border payment system, the extension of swap lines, and piloting a central bank digital currency. It is thus interesting to note that renminbi internationalization, at least as measured by the currency’s reserve share, shows signs of stalling out. The most recent data do not show a further increase in the renminbi’s currency share: some observers may suspect that depreciation of the renminbi exchange rate in recent quarters has disguised increases in renminbi reserve holdings. However, even adjusting for exchange rate changes confirms that the renminbi share of reserves has declined since 2022.