#HeadlinesTell the truth #SWIFT (Society for Worldwide Interbank Financial Telecommunication) released the news that in December 2023, RMB accounted for 5.07% of global cross-border transactions based on value statistics, ranking third again. The top two are the US dollar and the euro, accounting for 82.84% and 7.35% respectively.
Netizens who often read Nansheng's articles may have noticed that in November 2023, the US dollar accounted for 83.97%, the RMB accounted for 5.7%, and the euro accounted for 5.61% of global cross-border trade - the RMB has surpassed the euro and ranked second in the world.
One month ago, in October 2023, the US dollar continued to lead global cross-border trade with 84.22%, followed by the euro at 5.85% and the renminbi at 5.12% – this time in third place, behind the dollar and the euro.
Another month ago, in September 2023, the market share of the Chinese RMB in global cross-border trade settlement was 5.8%, ranking second, the US dollar accounted for 84.15%, ranking first, and the euro accounted for 5.43%, ranking third.
Let's see it clearly, the US dollar is firmly in the first place in global cross-border trade settlement, and the RMB and the euro are fiercely competing for the second place, and the two are repeatedly surpassing and being surpassed. Is this the rapid rise of the renminbi, or the sinking of the euro?
The euro has lost its competitive position with the dollar
After the birth of the eurozone, the euro was the only currency that could "challenge the current status of the dollar" for a long time. For many years, the U.S. dollar has been the main reserve and payment currency of countries and regions around the world, and its status seems unshakable.
After the establishment of the euro zone, the euro gathered the currency attributes of European powers such as Germany, France, and Italy, and jumped to the second place in the world, and was significantly ahead of various currencies ranked after the dollar and the euro. For a time, the euro was on a par with the dollar.
Important people in Europe are full of praise for the significance of the euro and its achievements. "We are all proud that the euro is one of the most powerful and sustainable investment currencies in the world".
After its official circulation in 2002, the euro quickly developed into the world's second largest currency, even overtaking the dollar in some areas - a subverted achievement of the "international status of global currencies", and the euro was highly expected by many countries.
However, with the changes in international trade, the deepening and differentiation of international cooperation, and geopolitical fluctuations, especially after the Russia-Ukraine conflict, the EU followed the US policy and imposed deep sanctions on Russia, so that the international community fully realized: holding the euro and holding the dollar.
There is no essential difference, and the potential risks associated with holding the US dollar are exactly the same as those of holding the euro. If the United States uses its financial hegemony to encircle other countries, the EU will follow suit and lose its independence. So what are you doing with the euro, either in dollars or in non-"American currencies".
To a certain extent, the euro has been positioned as the "shadow currency of the dollar" by many countries, which has undoubtedly greatly damaged the international status of the euro - those countries that once wanted to use the euro to partially replace the dollar have lost confidence in the euro, and the share of the euro market has declined significantly.
Although the status of the renminbi is not high enough, its potential is huge
Looking at the whole world, the US dollar is dominant, and currencies such as the euro, the British pound, and the yen are all positioned as "shadow currencies of the US dollar" to varying degrees. As long as the United States uses financial instruments to impose sanctions on other countries, the euros, pounds, yen, etc. held by the United States are all at risk.
Excluding these "American currencies", the only currency that can enter the eyes of other countries and regions is the Chinese yuan, although the international status of the yuan is not enough, but this is not many alternatives, and even the only option for some countries to conduct international trade.
In particular, as the renminbi's share in international payments and reserves continues to increase, it will shoulder more international responsibilities and obligations, and will need to strengthen cooperation with other countries and international organizations to jointly promote the diversification and sustainable development of the international monetary system. This article is written by Nansheng, please do not reprint or plagiarize without authorization!