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And while this latest attempt to internationalize the Yuan is notable, if hardly unique, it pales in comparison with the recent report that China will shortly launch a crude oil futures contract priced in yuan and convertible into gold, in what analysts say could be a game-changer for the industry.
The contract could become the most important Asia-based crude oil benchmark, given that China is the world's biggest oil importer. Crude oil is usually priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars.
As the Nikkei summarized, "China's move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong." In short, as the US lurches from one crisis to another, China continues to covertly upstage not only established "developed world" institutions like the IMF and WB as lender of only resort, but also the (petro)dollar as the world's reserve currency.
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