Can China’s BRI Drive the Decline of USD Global Dominance?

In a global development, a rising number of nations consider replacing the US Dollar (USD) with the Chinese Yuan (CNY), led by China’s Belt and Road Initiative (BRI) launched in 2013.

This initiative, focused on extensive global infrastructure development, aids China in providing substantial loans for developmental projects in countries like Pakistan, Sri Lanka, and several African nations.

China Boosts Yuan Globally

China strategically employs the BRI to promote the Yuan in global trade, potentially altering currency preferences.

With 155 countries engaged in the BRI, reports suggest China might prioritise the Yuan over the USD in global trade transactions, signifying a trend of de-dollarisation in developing nations.

China’s plan to use the Digital Yuan (CBDC) for BRI projects could accelerate this process.

Digital Yuan and BRICS Alliance Alignment

The possible shift to the Yuan for loan repayments and trade transactions by 155 countries could impact several US sectors.

The Digital Yuan, coupled with the BRI, aligns with the BRICS alliance goals to reduce USD dominance in global markets, impacting international economic relations.

The growing inclination towards the Yuan could lead to changes in trade balances, currency reserves, and the global financial system.

This shift may benefit China by increasing economic influence and reducing reliance on the USD.

Would China Yuan Replace USD?

Questions arise about the USD’s future as the primary reserve currency, challenging its long-held position.

The consideration to replace the USD with the Yuan, driven by China’s BRI, marks a turning point in global finance.

If realised, it could reshape the international monetary system, impacting global trade, economic power, and the USD’s status.

The world closely observes this potential shift, anticipating its unfolding impact on the global financial landscape.

* Original content written by Coinlive. Coinbold is licensed to distribute this content by Coinlive.