Harvard economist Kenneth Rogoff forecasts that the Chinese yuan will become a global reserve currency within five years, driven by President Xi Jinping's push for yuan internationalization. Rogoff highlights the global demand for diversification away from the US dollar, suggesting China's timing is strategic. Key steps for China include opening its government bond markets to foreign investors and developing financial infrastructure independent of the SWIFT system, leveraging blockchain technology.
Rogoff also discussed the impact of cryptocurrencies on currency competition, noting that digital assets, especially stablecoins, have captured a significant share of illicit transactions. However, he cautioned that cryptocurrencies will not replace the dollar in the legal economy due to regulatory powers. Rogoff criticized the US Genius Act for its lenient stablecoin regulations and predicted future rules will align with central bank digital currency standards.
Harvard Economist Predicts Yuan's Rise as Global Reserve Currency
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