According to a report on Fox Business on Saturday, several experts have discussed the possibility of China and Russia developing a new gold-based currency. They emphasized that China has been buying up significant amounts of gold while Russia has been forced to abandon the U.S. dollar due to sanctions imposed after its invasion of Ukraine.
According to the news source, some experts have expressed concern that these actions, combined with the stronger ties between Moscow and Beijing, suggest that China may be attempting to introduce a gold-backed currency. But neither China nor Russia have formally endorsed proposals for such a currency.
Chinese authorities have discussed restructuring the global financial system and lessening the dominance of the U.S. dollar for two decades, according to Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. ambassador.
The amount of gold sent from Switzerland to China in July reached its highest level since December 2016. During the month, 80.1 tonnes of gold worth 4.4 billion Swiss francs ($4.4 billion) were carried from Switzerland to the Chinese mainland.
According to Min-Hua Chiang, a research scholar and economist at the Asian Studies Center of the Heritage Foundation, the new currency between Russia and China "will be restricted" in popularity because of the meager volume of trade.
According to data from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a provider of international financial messaging, 42.6% of all payments made worldwide in August were made in US dollars, 34% in euros, and 2.3% in Chinese yuan.
The economist from the Heritage Foundation emphasized that the yuan "is still leagues behind the USD and euro," and that a global currency like the euro requires "a level of political and economic coordination and integration that is not present in Asia today." She thought:
The USD remains the safest, most convenient and most widely used currency in Asia and in the world today. No other currency (backed by gold or otherwise) is comparable, and that is unlikely to change in the near future.
