If there is one area where China’s yuan currency could provide an alternative to the dollar, it would be the gold trade, according to Mark Tinker, Head of AXA Framlington, reports Bloomberg.
The yuan is at its highest in more than a year, and only accounted for just two percent of Swift global payments in July.
In a note obtained by Bloomberg, Tinker wrote that China’s pricing of assets in yuan -- together with the Hong Kong Stock Exchange’s plan to sell physical gold contracts priced in the currency -- could sidestep the U.S. banking system.
“Having accepted payment for oil or gas in RMB, the seller, be it Russia or Saudi Arabia or anyone else for that matter, does not have to worry about having excess RMB, they can simply trade it back into gold,” Tinker said. “We are moving to a multi-polar world.”