Yuan versus the dollar: Propose a third option

As China attempts to globalize its legal tender; America guards the supremacy of its own and digital currencies gain traction, India should revive Keynes' idea of a global trade currency

- 

If China fancies the chances of its yuan taking on the mighty US dollar, India must keep watch. Right now, it is a no-contest. The yuan accounts for just 4% of international payments, while the dollar notches up about half of them. Only 2% of the forex reserves of central banks are held in yuan assets versus 58% in dollar assets. Yet, signs of Beijing's long game have begun to emerge. How it fares will test not just its resolve, but whether a fully convertible currency is necessary for global dominance. Misguided US sanctions after the 2022 outbreak of war in Europe have catalyzed Chinese efforts. Despite its economic slowdown, China's trade heft is aiding its push for settlements in its own currency. Over 30% of its trade is already yuan-based. Its banks have been lending abroad in yuan instead of dollars to make yuan payments more acceptable for its imports, even as it bills more of its exports in yuan to crush exchange-rate risks and stay off the grid of dollar flows that's perilously exposed to punitive US clamps. Globally, many banks have signed up for its CIPS alter