Why China's Yuan Is Unlikely to Challenge the Dollar Anytime Soon
The internationalization of a currency is a long, multi-step process which, for all its talk, China seems singularly unwilling to undertake.
by Claudio Testoni Cardozo
November 18, 2018
After the 2008 crisis, there was a decline in dollar preponderance in the international economy compared to China’s rise, as the latter gradually attempted to reduce dependence on the American currency and to discuss the possibility of the yuan becoming the main currency used in international market transactions in the future.
But is this a threat to the dollar’s hegemony? According to several researchers, monetary hegemony is achieved not only through coercion but also through the consensus of all parties involved as a synthesis between domination and direction, or as Perry Anderson says, as a “dynamic balance between force and consent.”
From An Historical Perspective
Let’s take a look at the history behind this American monetary hegemony. At the end of World War II, the Bretton-Woods agreement confirmed the United States’ central position in the international market with the definition of the international dollar-gold standard. Soon after, in …
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