Floating China? Big banks start to push the Renmibi as a default currency

The unipolar world with the US dollar as the primary means of exchange is coming closer to an end.  Who knows how it will end.  It could be next week, next year or in 100 years. 

China is starting to flex their economic muscle and would like transactions in China to be done in Renmibi.  There is a premium for having your currency be the accepted medium for transactions.  Your cost of capital is artificially low and China would like to take advantage. 

There is also an expected floating of the Renmibi sometime in the future.  This could be to prepare them for such an event.  Via FT:

A number of the world’s biggest banks have launched international roadshows promoting the use of the renminbi to corporate customers instead of the dollar for trade deals with China.

HSBC, which recently moved its chief executive from London to Hong Kong, and Standard Chartered, are offering discounted transaction fees and other financial incentives to companies that choose to settle trade in the Chinese currency.

HSBC and StanChart are among a slew of global banks – including Citigroup and JPMorgan – holding roadshows across Asia, Europe and the US to promote the renminbi to companies.

The move aligns the banks favourably with Beijing’s policy priorities and positions them to profit from what is expected to be a rapidly growing line of business in the future.

The phenomenon will accelerate Beijing’s drive to transform the renminbi from a domestic currency into a global medium of exchange like the dollar and euro.

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