Layman here, from what I understand this is a major news : it means China is allowing a foreign corporation (european commercial bank) to offer Yuan currency services to clients. Given how tight of a currency control policy the CCP has, it’s quite surprising that they would let a foreign based company into their currency dealings.
replyThe ccp has allowed foreign banks to offer yuan services since before it existed, there isn’t an effective way for them to prevent it and it’s the basis of all that foreign trade they do.
replyWhat’s new about this is that a European bank can clear yuan directly without a Chinese bank intermediary. That’s a big deal but duetche isn’t the first foreign bank to do this. Singapore has banks that do this already. And JP Morgan clears directly in the states.
It means that nations are beginning to abandon (or at least hedge against) the dollar as the world's currency, due to the host nation's instability and global political situation. "Great Again", indeed.
replyIdk why you say so, but the Deutsche Bank is not a national bank.
replythey didn't say it was
replyThe use of "nations" in that comment is not clear nor substantiated, not in the comment itself, nor in the article. So just to be clear that DB is not tied to a nation, even though the name suggests it is.
replyOP means the USD & US nation is not stable, hence DB looking to clear Yuan.
replyDo you also make this clarification whenever Bank of America is mentioned, such that no one is confusing it with the FED?
replyAnd do nations use Deutsche Bank's services?
replyYes. For instance, the National Bank of Ukraine has an account at Deutsche Bank.
replyBasically before if Deutsche bank wanted to pay a Chinese bank, it had to use some intermediary like Bank of China Frankfurt. Now it can settle with the chinese-mainland bank directly.
replyIt means you can settle an international transaction in CNY with Deutsche Bank. Imagine a European lender financing a project in Nigeria that involves purchasing a lot of infrastructure from China.
replyIt means the dollar is dying.
replyPeople have been saying the dollar is dying since the 19th century. They said it again during the Great Depression, the end of Bretton Woods and the 2008 Financial crisis..
replyUS dollar value was held by several pillars, among which- pax americana, petro dollar/assets and innovation sector. Pax americana is dismantled by US itself. Petro chemicals are threatened by ren transition and China. Tech sector still ensures having a lead in innovations. Guess what'll happen when/if pax americana will be fully dead, most important economies like EU/China/India will be able to supply own needs with less petrol products since the rest will com from ren and when/if tech AI pops/turns into a fiasco. Nothing lasts forever and US dollar is no exception
replyLook at a 100 year purchasing power chart of USD, doesn't look very healthy...
replyThose people were right, it’s just that it will take more time that what they though.
replyThe difference is now the US has a leader that is actively encouraging its downfall.
replyWhat did it mean when JP Morgan setup the first such relationship with the pboc in 2018?
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