1. No one sane trusts EU after RU sanctions either.
2. Euro share of SWIFT shrunk from ~40% to ~20% post URK war. Part of this technical (t2 reforms), i.e. actual reduction not as dramatic, but Euro as toxic as USD with even less leverage.
Meanwhile PRC went from single digit % cross border settlements 10 years ago to 50%+, plenty of the world trust PRC with their money, not just money but PRC alternative to SWIFT financial plumbing, CIPS. Meanwhile PRC also recycling it's surplus USD to lending... i.e. they're financing more than imf/worldbank/paris club right now. Another indicator that countries "trusts" PRC to manage monetary system, or rather they balancing from losing trust of west.
TBH trust is western mindless muh reserve orthodoxy nonesense. Ultimately PRC has much stronger reserve posture for the same reason US did... for 80+ years countries needed USD for US techstack and then petrodollar, aka modernity was locked behind USD, all the other muh reserve "needs" is downstream of that. Need > trust.
Ironically where trust actually comes in is whether PRC TRUSTS others. Qiushi suggests PRC stable reserve functions something like panda bond lending, where PRC lends liquidity to trusted VIP (real economy) players. Everyone else can keep gambling with USD reserve with high likelihood of debasement. It looks like PRC doesn't want be THE reserve, they want to be VIP reserve while THE (USD) reserve burns.
alt Hacker News
1. No one sane trusts EU after RU sanctions either.
2. Euro share of SWIFT shrunk from ~40% to ~20% post URK war. Part of this technical (t2 reforms), i.e. actual reduction not as dramatic, but Euro as toxic as USD with even less leverage.
Meanwhile PRC went from single digit % cross border settlements 10 years ago to 50%+, plenty of the world trust PRC with their money, not just money but PRC alternative to SWIFT financial plumbing, CIPS. Meanwhile PRC also recycling it's surplus USD to lending... i.e. they're financing more than imf/worldbank/paris club right now. Another indicator that countries "trusts" PRC to manage monetary system, or rather they balancing from losing trust of west.
TBH trust is western mindless muh reserve orthodoxy nonesense. Ultimately PRC has much stronger reserve posture for the same reason US did... for 80+ years countries needed USD for US techstack and then petrodollar, aka modernity was locked behind USD, all the other muh reserve "needs" is downstream of that. Need > trust.
Ironically where trust actually comes in is whether PRC TRUSTS others. Qiushi suggests PRC stable reserve functions something like panda bond lending, where PRC lends liquidity to trusted VIP (real economy) players. Everyone else can keep gambling with USD reserve with high likelihood of debasement. It looks like PRC doesn't want be THE reserve, they want to be VIP reserve while THE (USD) reserve burns.