BRICS member China could use the Belt and Road Initiative (BRI) to advance the Chinese Yuan and diminish the USD. For the uninitiated, China launched the Belt and Road Initiative in 2013 and provides loans to developing countries to build seaports, infrastructural projects, and railroads, among others. China finances developmental projects worldwide by releasing huge loans to Pakistan, Sri Lanka, and several African countries.
Also Read: BRICS: 15 Countries to Ditch US Dollar for Oil Trade?
A total of 155 countries have signed the Belt and Road Initiative with China and received funds for developmental projects. However, reports indicate that BRICS member China could soon use the BRI initiative to further the Chinese Yuan’s usage by putting it ahead of the USD for global trade. Read here to know the list of countries that have signed the BRI agreement with China.
Also Read: BRICS: De-Dollarization Gaining Steam in Developing Countries
BRICS: China Could Use Chinese Yuan For Belt and Road Initiative & Challenge USD
China is looking to internationalize the Chinese Yuan through BRI as 155 countries fall under the bracket of the Communist nation. Reports suggest that China is waiting for the Digital Yuan (CBDC) to take shape before making the Yuan the de facto payment for BRI projects.
Also Read: BRICS: U.S. Dollar Dips Against Local Currencies
In other words, countries that receive loans from China through BRI could soon return the finances with the Chinese Yuan. The USD might no longer be used to settle loans with China in the coming future. 155 countries could initiate loan repayment in the Chinese Yuan and not the US dollar if the rule is announced.
Read here to know how many sectors in the US will be affected if China pulls such a move. The Digital Yuan could change the prospects of global trade and the Belt and Road Initiative will be the catalyst. The BRI initiative coincides with the BRICS alliance that is also looking to dethrone the USD’s prospects.