Retired Chinese central bank governor Zhou Xiaochuan, in statements that seem to cast doubt on claims that virtual currencies could dethrone the US dollar anytime soon, claimed the dollar will retain its status as the world's reserve currency. According to Xiaochuan, the dollar still "has a lot of inertia."
He emphasised in a subsequent interview that "until there is [a] shift in the globalized world," the US dollar would continue to be the global reserves and trade commodity. Although admitting that cryptocurrency transactions might eventually create competitors to the dollar, the former governor stated that any approach to replace the function of the us$ is expected to be "extremely sluggish."
Meanwhile, in an appearance with CGTN, Xiaochuan cautioned that economic "wrong decisions" by the US administration may have an impact on the dollar's prolonged supremacy. One such error, according to Xiaochuan, who is now the deputy chief of the Boao Council for Asia, and the utilization of the dollar as a punishing mechanism. In contrast, if we got depend far more on the USD network to implement monetary punishments, individuals would conceal before you, and your position in settlement and deposits would certainly fall, according to Xiaochuan.
Nonetheless, the ex-governor warns about using the USD network to place penalties, like some of the other reasons, which would not result in a quick decline in the country's currency supremacy. He stated that perhaps the dollar "has considerable persistence" when viewed from the standpoint of assets or asset preservation.
"That I cannot argue that these monitory you saved before are all now useless," Xiaochuan said.
Whenever it comes to compensation, the former governor claimed that it's because individuals have grown accustomed to being treated in dollars, that they will find it difficult to switch to an equivalent.
Notwithstanding his pessimism well about chances for substitutes for the dollar, Xiaochuan stated that China supports worldwide reserves that might not be controlled by the us$.