What's new

China’s digital yuan displaces the dollar

onebyone

SENIOR MEMBER
Jul 2, 2014
5,599
-4
13,549
Country
Thailand
Location
Thailand
China’s digital yuan displaces the dollar
$16 trillion of US dollar deposits may disappear
By DAVID P. GOLDMANAPRIL 21, 2021
1618967435222.png


Either the Biden Administration or Bloomberg (or both) is confused. China has no intention of replacing the US dollar with its RMB within the framework of the existing world banking system, as People’s Bank of China Deputy Governor Li Bo said April 19. In fact, China has no incentive to this, and could not do so even it wanted to.

The $16 trillion of offshore dollar deposits at international banks won’t turn into the equivalent amount of Chinese yuan. Instead, that $16 trillion will shrink to a small fraction of its present volume, because the Big Tech/fintech revolution will make them redundant. Instead, as Morgan Stanley analysts explained this week, “banks will lose their deposit base” as digital currencies replace their most basic functions.

What Western analysts fail to grasp is that China is not trying to take the place of the United States. Rather, China is creating a new system of world trade and finance that will – as a byproduct – replace the methods of trade financing that have remained in place since the Venetian Republic introduced them in the 13th century.

1618967681509.png



The Morgan Stanley team argues that the digital yuan won’t threaten the reserve status of the dollar, which technically is correct but misses the point: The digital system will hollow out the deposit base of the banking system, most emphatically for international trade financing. Reserve currencies won’t disappear, but they will become vestigial. Chetan Ahya’s report focuses on the domestic implications of digital currencies, which may be extensive, rather than the global implications, which will be tectonic.

The United States will lose what economists call seigniorage, a term that derives from the difference between the value of gold or silver coins and the their bullion content. This amounts to about $25 trillion by my rough estimate (the $16 trillion in overseas dollar deposits plus the $8 trillion in US Treasuries owned by foreigners).

The US will lose this enormous volume of cheap credit from the rest of the world just when it needs it the most.


 

Jobless Jack

FULL MEMBER
Aug 12, 2012
1,638
0
1,918
Yuan will replace the dollar, espacially in poor countries by 2024. As global economy open in 2022 and stabalizes from end of 2022 to end of 2024, Yuan will take over a significant market share from the dollar.

Imagine what would have happened if trumps insurrection worked. USA would have plunged into civil war. Taking itself down with the global Economy.

No one will take the chance. The yuan it is. America has shown itself as an unreliable shithole.

But sadly, this displacement will trigger nuclear war.
 

Titanium100

SENIOR MEMBER
Mar 1, 2019
2,168
-7
2,081
Country
Denmark
Location
Denmark
Yuan will replace the dollar, espacially in poor countries by 2024. As global economy open in 2022 and stabalizes from end of 2022 to end of 2024, Yuan will take over a significant market share from the dollar.

Imagine what would have happened if trumps insurrection worked. USA would have plunged into civil war. Taking itself down with the global Economy.

No one will take the chance. The yuan it is. America has shown itself as an unreliable shithole.

But sadly, this displacement will trigger nuclear war.
It won't start war that is 100% guaraanted the risk with war would be bigger loss for everyone and the US would have nothing to gain from it except conceding the dollars loss and move on
 

Jobless Jack

FULL MEMBER
Aug 12, 2012
1,638
0
1,918
It won't start war that is 100% guaraanted the risk with war would be bigger loss for everyone and the US would have nothing to gain from it except conceding the dollars loss and move on
I hope you are correct.

But the west will not be comfortable with a China led world order. From their point of view atleast.
 

Titanium100

SENIOR MEMBER
Mar 1, 2019
2,168
-7
2,081
Country
Denmark
Location
Denmark
Let us hope western leaders understand this fact as you and i have.
Imho if the dollar collapses humanity will find a solution quickly and make sure things flow immediately in order to safe everyone but however what could really start WW3 is an unexpected natural disaster that comes out of nowhere probably an asteroid/comet or a major volcano but the disaster has to be gigantic on global scale this will force everyone to fall upon each other with guaraantee due to shortage of resources. Everyone will go on the offense at that point or collapse from the within due to riots but nations will choice to rather go on the offense and distract the hungry and unsatisfied population from destroying each other or go to civil war.

Every nation at that point will function like immune defense system either accept your peril from within or distract the population and prevent them from doing that to themselves and revive nationalistic pride to distract them.. they will all eventually decide to Go on the offensive
 
Last edited:

Riea

FULL MEMBER
Dec 10, 2011
214
0
372
Country
Pakistan
Location
Canada
Digital currency can't be counterfeit and be paid 2 times by accident or intentional so they are way more secure than real money.
Note there was always the double spending problem with digital currency. blockchain(btc) solved it. I am quite sure the digital yuan is using blockchain tech.
 

Beast

ELITE MEMBER
Feb 5, 2011
24,195
-38
56,517
Country
China
Location
China
But sadly, this displacement will trigger nuclear war.
It will not. Nuclear war is the last thing US wants. Civil war in US and drop from world number 1 is better than Armageddon. US has no mean to win a nuclear war with China. And same as China.

Losing both arms are better than death. Conclusion, you still survive but just life is not as good as past.
 

Jobless Jack

FULL MEMBER
Aug 12, 2012
1,638
0
1,918
It will not. Nuclear war is the last thing US wants. Civil war in US and drop from world number 1 is better than Armageddon. US has no mean to win a nuclear war with China. And same as China.

Losing both arms are better than death. Conclusion, you still survive but just life is not as good as past.
Either way

This is the end of pax americana
 

Whizzack

FULL MEMBER
Jul 10, 2019
390
2
368
Country
Indonesia
Location
Indonesia
Even if this Digital Yuan doesn't displace the USD in the end, it's already good enough if it can provide an alternative / additional option to the existing SWIFT banking system...
 

Viet

ELITE MEMBER
Jun 18, 2012
23,462
0
17,486
Country
Viet Nam
Location
Germany
China’s digital yuan displaces the dollar
$16 trillion of US dollar deposits may disappear
By DAVID P. GOLDMANAPRIL 21, 2021
View attachment 735962

Either the Biden Administration or Bloomberg (or both) is confused. China has no intention of replacing the US dollar with its RMB within the framework of the existing world banking system, as People’s Bank of China Deputy Governor Li Bo said April 19. In fact, China has no incentive to this, and could not do so even it wanted to.

The $16 trillion of offshore dollar deposits at international banks won’t turn into the equivalent amount of Chinese yuan. Instead, that $16 trillion will shrink to a small fraction of its present volume, because the Big Tech/fintech revolution will make them redundant. Instead, as Morgan Stanley analysts explained this week, “banks will lose their deposit base” as digital currencies replace their most basic functions.

What Western analysts fail to grasp is that China is not trying to take the place of the United States. Rather, China is creating a new system of world trade and finance that will – as a byproduct – replace the methods of trade financing that have remained in place since the Venetian Republic introduced them in the 13th century.

View attachment 735964


The Morgan Stanley team argues that the digital yuan won’t threaten the reserve status of the dollar, which technically is correct but misses the point: The digital system will hollow out the deposit base of the banking system, most emphatically for international trade financing. Reserve currencies won’t disappear, but they will become vestigial. Chetan Ahya’s report focuses on the domestic implications of digital currencies, which may be extensive, rather than the global implications, which will be tectonic.

The United States will lose what economists call seigniorage, a term that derives from the difference between the value of gold or silver coins and the their bullion content. This amounts to about $25 trillion by my rough estimate (the $16 trillion in overseas dollar deposits plus the $8 trillion in US Treasuries owned by foreigners).

The US will lose this enormous volume of cheap credit from the rest of the world just when it needs it the most.


Ok digital yuan will replace USD. A chinese eunuch claims the seas. What’s about the return of dinosaurs?
 

Users Who Are Viewing This Thread (Total: 1, Members: 0, Guests: 1)


Top Bottom