Yeah, the pivotal point was Russia getting kicked out of SWIFT. That forced a creation of an alternate financial system out of necessity, and over past three years it’s expanded significantly within BRICS. The reality is that you don’t need to have a reserve currency, you can just do direct currency swaps. But more importantly, China is basically the world’s factory, and has a massive trade surplus with the rest of the world. Which means holding yuan is useful for other countries, since they can always exchange it for something tangible they need.
Thank you! That is very helpful as a launching point to read about this.
Intuitively, what I asked my liberal friend was, “is a reserve currency even necessary?” Turns out, neither of us knows anything about this. They’re just arrogant lmao
Yeah, the pivotal point was Russia getting kicked out of SWIFT. That forced a creation of an alternate financial system out of necessity, and over past three years it’s expanded significantly within BRICS. The reality is that you don’t need to have a reserve currency, you can just do direct currency swaps. But more importantly, China is basically the world’s factory, and has a massive trade surplus with the rest of the world. Which means holding yuan is useful for other countries, since they can always exchange it for something tangible they need.
Thank you! That is very helpful as a launching point to read about this. Intuitively, what I asked my liberal friend was, “is a reserve currency even necessary?” Turns out, neither of us knows anything about this. They’re just arrogant lmao
glad to help :)