End of US dollar dominance approaching – top Russian banker

CEO of Russia’s state-run bank VTB Andrey Kostin points to the inevitable rise of the Chinese yuan

The hegemony of the US dollar is seriously challenged by the rise of the Chinese yuan and by Washington’s failed attempt to wreck the Russian economy by weaponizing the greenback, Andrey Kostin, head of Russia’s banking major VTB, told Reuters on Friday.

The major banking figure said that under the current geopolitical circumstances more and more nations are shifting away from trade settlements in dollar and euro, while China is moving towards removal of strict currency policies.

“The long historical era of the dominance of the American dollar is coming to an end,” Kostin said, in an interview with the news agency. “I think that the time has come when China will gradually remove currency restrictions.”

According to Kostin, VTB has been discussing using the Chinese national currency in settlements with third countries.

“China understands that they will not become world economic power number one if they keep their yuan as a non-convertible currency,” he explained, adding that it was also dangerous for the Peoples Republic to keep reserves invested in US Treasuries.

READ MORE: Share of dollar in global reserves lowest in 28 years – IMF

The US dollar has been enjoying the status of world’s reserve currency for more than a century after it managed to subsume the British pound sterling. Earlier this month, JPMorgan Chase analysts said the global economy is showing signs of the emergence de-dollarization, against a background of rising efforts by Asian economies to challenge the American currency’s hegemony.

The greenback’s long-standing status as the world’s dominant currency has been steadily eroded in recent years due to mounting concerns over soaring US debt and widely implemented sanctions using the currency as leverage.

Find more stories on economy and finance in TROIB business