Will the dominance of the dollar give way to a multipolar system of currencies?

In the wake of an invasion that drew international condemnation, Russian officials panicked that their dollar-denominated assets within America’s reach were at risk of abrupt confiscation, sending them scrambling for alternatives. The invasion in question did not take place in 2022, or even 2014, but in 1956, when Soviet tanks rolled into Hungary. 

This event is often regarded as one of the factors that helped kick-start the eurodollar market—a network of dollar-denominated deposits held outside America and usually beyond the direct reach of its banking regulators.

The irony is that the desire to keep dollars outside America only reinforced the greenback’s muscle.

In the wake of the Russian invasion of the Ukraine the new outbreak of financial conflict through sanctions has raised the question of whether the dollar’s dominance has been tarnished, and whether a multipolar currency system will rise instead, with the Chinese yuan playing a bigger role.

Read the full article on The Economist HERE. 

China launches cross-border payment system

From Finextra -

“China's cross-border interbank payments system, established as a yuan-based alternative to the interbank Swift network, has launched with 11 domestic banks and eight foreign institutions onboard.

The CIPS platform will be used to support cross-border goods and services trade settlement, direct investment, as well as financing and individual fund transfers, with the aim of boosting yuan liquidity globally. CIPS uses global payment standards and enables same day clearing across Asia, Oceania, Europe and other time zones through extended operating hours.”

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China's international payments system is almost ready

From Business Insider -

“A long-awaited China International Payment System (CIPS) that would facilitate international usage of the yuan is ready and may be launched as early as September or October, three sources with direct knowledge of the matter told Reuters.

The system, which would be a worldwide payments superhighway for the yuan, will replace a patchwork of networks and allow hassle-free renminbi transactions, greatly boosting the internationalization of the Chinese currency.”

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