The chief executive of Russia’s second-largest bank says that the US dollar is on the verge of losing its role as the world’s dominant currency amid the rise of the Chinese yuan.
In a new interview with Reuters, VTB Bank CEO Andrey Kostin says the move by the United States and its allies to block Russia from accessing hundreds of billions of dollars worth of gold and foreign exchange reserves is driving many nations to use currencies other than the USD to settle international trades.
According to Kostin, the yuan could end up usurping the dollar as China appears to be on the path of loosening its extensive currency controls.
“The long historical era of the dominance of the American dollar is coming to an end. I think that the time has come when China will gradually remove currency restrictions.”
In China, individuals and institutions cannot freely move money in or out of the country unless they follow strict foreign exchange rules.
Says Kostin,
“China understands that they will not become world economic power number one if they keep their yuan as a non-convertible currency.”
The Russian banker also says that it is “dangerous” for China to continue holding and accumulating US debt.
Billionaire Ray Dalio said in an interview with Bloomberg that some countries are hesitant to invest in US debt after seeing how the West weaponized the dollar to penalize Russia over the war in Ukraine. According to Dalio, the US is now in a debt crisis as he believes the government will struggle to find buyers for newly issued bonds.
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