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Could Chinese-Russian Partnership Destroy the Dollar?

November 1, 2017
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Between cryptocurrency, blockchain and the ever-changing nature of the globalized economy, currency has never been as in flux as it is today. Just when analysts thought the game couldn’t get any crazier, Russia and China seem to have turned everything on its head.

According to Reuters:

Russia and China were considering linking their national payment system, Russian Prime Minister Dmitry Medvedev said on Wednesday, as he called for a more balanced global finance structure.

This could have huge ramifications for the Asian currency market. As China continues to push forward in its aggressive bid to cement its regional economic dominance, a partnership of this magnitude could completely change how the world’s largest continent pays for goods. Reuters continues by saying that:

After new U.S. sanctions were imposed, Moscow promised to intensify work to cut dependence on Western payment systems further. Among other things, it wants to create more domestic financial services such as its own ratings agency.

A pan-Asian payment system of this size would reach out to billions of clients which would give the Mir card and its Chinese counterparts an immense market to exploit. If the partnership does go through, then the value of American credit card companies could diminish.

Read: Is China Positioning Itself to Go to the Next Level?

Investors in both payment systems and the dollar should play close attention to any developments in this storyline. Any payment system that is created by Russia and China would not be conducted in U.S. dollars so currency traders should be just as alert as investors.

To read Reuters’ article on the proposed Chinese-Russian payment partnership, click here.

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