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.

Kinross Gold Corporation (KGC) Price Targets: What Are They?
The stock of Kinross Gold Corporation (NYSE:KGC) decreased by $0.0 on Monday to finish at $4.85, down 0.00 percent. The last five days have seen an average…
Aston Bay optionee drills 1.1% copper over 67.1 metres at Storm project, Nunavut
Aston Bay Holdings Ltd. [BAY-TSXV; ATBHF-OTCQB] reported additional assay results confirm thick intervals of copper…
The Top Reasons Investors are Pushing Back into the Safe Havens of Gold
Safe-haven investors are pushing back into gold. All after activity in the U.S. service sector was shown to have fallen more than expected in May. In…
-
Economics24 hours ago
Stocks To Still Extend S&P 500 Upswing
-
Companies23 hours ago
Aztec Minerals (TSXV:AZT) Reports Promising Silver and Gold Assay Results from 2023 Tombstone Drilling Program
-
Economics23 hours ago
Key Events This Week: Quiet Ahead Of Next Week’s Storm
-
Economics23 hours ago
Stock Market Broadens Out on Big Upside Breakout
-
Companies4 hours ago
enCore Energy Enters Definitive Agreement for the Sale of the Marquez-Juan Tafoya Uranium Project
-
Base Metals23 hours ago
Rio Tinto plans $395m investment in desalination plant
-
Companies23 hours ago
Quebec Explorer To Expand Gold Resource, Search for Lithium
-
Precious Metals23 hours ago
In Search of Stable Money