Precious Metals
China Moves Away From US Dollar, Ahead Of Digital Yuan
China Moves Away From US Dollar, Ahead Of Digital Yuan
Tyler Durden
Fri, 09/04/2020 – 18:25
Authored by Shaurya Malwa via Decrypt.co,
In brief
-
China is reducing exposure to the US dollar amidst fears of massive inflation.
-
The country has sold over $109 billion worth of US bonds in the first half of 2020.
-
Its upcoming digital yuan is a contender to the US dollar’s long-held global dominance.
China is likely to reduce its holdings of US Treasury bonds to just under $800 billion from the current level of more than $1 trillion, according to local news outlet Global Times.
A major reason for the reduced exposure is the record amounts of US dollars being printed by the country’s Federal Reserve, leading to fears among investors and central banks of imminent inflation. Another is US President Donald Trump’s repeated attacks on the Chinese administration, the report said.
Currently, China is the world’s second-largest holder of US debts, but it has been reducing its holdings of US bonds in recent years. In the first half of 2020 alone, China sold an estimated $106 billion worth of US bonds – a 3.4% decline compared to 2019.
Xi Junyang, a professor at the Shanghai University in China was cited as saying that China is on track to reduce its holdings of US bonds from $1 trillion to $800 billion. But he added, “China might sell all of its US bonds in an extreme case, like a military conflict.”
Bitcoin critic and gold investor Peter Schiff agreed, tweeting, “My feeling is that China will reduce its exposure by much more. It’s also likely that other nations will do likewise.”
If true this is very significant. In fact, my feeling is that China will reduce its exposure by much more. It’s also likely that other nations will do likewise. That means the Fed is gonna need a much bigger printing press and Americans had better be prepared to really pay up! https://t.co/mcemxItX3o
— Peter Schiff (@PeterSchiff) September 3, 2020
Schiff added, “That means the Fed is gonna need a much bigger printing press, and Americans had better be prepared to really pay up.”
Rise of the yuan
The report added that many other countries might diversify their foreign exchange reserve assets to decrease the reliance on US-dollar assets. This would be in the hope of minimizing potential risks caused by US debt.
China’s upcoming digital yuan will be a contender. Officially called the Digital Currency Electronic Payment, it will increase the accessibility and accountability of the yuan while increasing international trade on its wholly-digital system.
Experts have already said that the digital yuan may threaten the US dollar’s status as the world’s reserve currency. Now that it’s getting ready for launch, China may not need the US dollar any more.

The Mining Companies in Ecuador to Watch in 2023 – Solaris Resources, Lundin Gold, and More
Ecuador has become one of the most attractive countries for mining investments in Latin America, with a favourable investment climate, attractive legal…
Emergent Metals Intersects Visible Gold In Early Drilling At Trecesson Property
Visible gold has reportedly been intersected by Emergent Metals (TSXV: EMR) as they get underway with their previously announced drill
The post Emergent…
Gold Prices Are Being Squeezed by a Strengthening Dollar
Despite lingering enthusiasm towards riskier assets, investors will likely need some further bullish catalyst in order to stay invested in equities…
-
Companies15 hours ago
Independent Preliminary Economic Assessment for Atlas Salt’s Great Atlantic Project Supports State-of-the-Art “Salt Factory” Vision
-
Companies23 hours ago
Top Reasons to Invest in Lithium Stocks Now – $LBNK.V $ALB $LAC $LI.V $PLL
-
Base Metals19 hours ago
“Recession Is On Its Way” – Dallas Fed Shows Factory Activity Slumps For 9th Straight Month
-
Uncategorized16 hours ago
Are metals headed for a golden age?
-
Financing News16 hours ago
CORRECTION FROM SOURCE: Excelsior Mining Announces Extension of Nebari Loan and US$3,000,000 Financing
-
Uncategorized21 hours ago
My top picks in the resources sector
-
Financing News22 hours ago
Medgold signs Definitive Amalgamation Agreement for proposed acquisition of Balkan Metals Corp. and issues Convertible Debenture
-
Financing News21 hours ago
Blue Thunder Mining Inc. to Combine with Analog Gold Inc.