billionaire venture capitalist Chamath Palihapitiya allegedly saidin April, that the whole discussion on social media about de-dollarization is one giant “nothingburger” and highlighted the fact that China’s yuan – being talked about as an alternative – is pegged to the dollar, A fact that most people don’t take into consideration.
“As long as it’s pegged, whether you trade through the US dollar or you don’t and you go straight into the yuan, you’re indexed to the US dollar. And then you use the dollar swap in that currency.” do to change what you need,” he Said In the latest All-In podcast episode in April.
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In February, China’s central bank signed a memorandum of understanding on setting up a yuan clearing system in Brazil to help strengthen the currency’s global influence. A year after the Ukraine War, the yuan also took over the position held by the US dollar as the most traded currency in Russia. Western sanctions against Moscow.
Actual prices: Palihapatiya said that until the yuan is unpegged into a free-floating currency, people will never know what the real market clearing value is. He also pointed to the fact that China has been effective in manipulating the currency ever since they were brought into the WTO.
“They were able to artificially depress the value of their currency so that exports from China could gain traction in countries around the world. You have to take this currency peg into account and you have to ask the question: Where would the currency be if it were free- Wasn’t floating and then what incentive would people have to convert the dollar?” He mentioned.
The billionaire venture capitalist believes there are several interesting questions worth asking in this regard. “I think you have to be a little more intellectually honest in order to have a discussion,” he said at the time.
This story was originally published on April 10, 2022
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