Is the Yuan ready to compete with the U.S dollar?
Duncan Richardson, News Editor
12 Mar 2015, 10:09 a.m.
China is set to launch its own cross border payment system in the third quarter of this year. The China International Payment System (CIPS) will be the Chinese version of the west based SWIFT system.
The CIPS will process cross boarder yuan transactions and further internationalise the currency. The new system will cut transaction costs and quicken processing time. It will also allow the Yuan to compete more evenly against the world’s reserve currency the U.S dollar.
The announcement comes only weeks after the Russia confirmed they will launch their alternative to the SWIFT system. By having an alternative Russia is protecting itself should the West decide to ramp up the economic sanctions placed on them.
Many in the gold community believe Russia and China are preparing the infrastructure for a world where the U.S dollar is dethroned as the world’s reserve currency. The dollar has been the world reserve currency for over 40 years. However, with the world weighed down with debt and currency wars intensifying, is the world ready to return to gold backed currencies?