1/11
I don't think this is correct: "A successful rollout of the digital renminbi, which will be firmly under the control of the PBoC, is likely to make the Communist party more comfortable with relaxing controls because...
ft.com/content/efa3ec… via @financialtimes
I don't think this is correct: "A successful rollout of the digital renminbi, which will be firmly under the control of the PBoC, is likely to make the Communist party more comfortable with relaxing controls because...
ft.com/content/efa3ec… via @financialtimes
2/11
the authorities will have full visibility over two-way flows."
You cannot simultaneously ease restrictions on capital flows and tighten them. If digital RMB is a better medium of exchange than non-digital RMB, it must be because of lower transaction costs and...
the authorities will have full visibility over two-way flows."
You cannot simultaneously ease restrictions on capital flows and tighten them. If digital RMB is a better medium of exchange than non-digital RMB, it must be because of lower transaction costs and...
3/11
fewer restrictions on trading and settling. These easier conditions won't matter much to fundamental investment flows and will matter only a little to trade-related flows, but they will have a huge positive impact on speculative flows and flight capital, and they will...
fewer restrictions on trading and settling. These easier conditions won't matter much to fundamental investment flows and will matter only a little to trade-related flows, but they will have a huge positive impact on speculative flows and flight capital, and they will...
4/11
make it much harder for Beijing to manage domestic liabilities and the equivalents of domestic bank runs.
The USD is the dominant global currency not because it is the easiest to use for "good" transactions (i.e. trade settlement and fundamental investing) but because...
make it much harder for Beijing to manage domestic liabilities and the equivalents of domestic bank runs.
The USD is the dominant global currency not because it is the easiest to use for "good" transactions (i.e. trade settlement and fundamental investing) but because...
5/11
it's the easiest to use for all transactions – including the massive and often disruptive financial flows that dominate international capital movements – and because of a widely-held perception that foreign ownership of US assets is protected by law, and that these assets...
it's the easiest to use for all transactions – including the massive and often disruptive financial flows that dominate international capital movements – and because of a widely-held perception that foreign ownership of US assets is protected by law, and that these assets...
6/11
can be sold and the proceeds whisked out of the country on a moment's notice without any restriction.
This is not the case in China and is unlikely to be for many more years, if ever. As it is, Beijing is already worried about the impact of foreign capital inflows into...
can be sold and the proceeds whisked out of the country on a moment's notice without any restriction.
This is not the case in China and is unlikely to be for many more years, if ever. As it is, Beijing is already worried about the impact of foreign capital inflows into...
7/11
China and how this will make it harder to impose domestic financial stability. I really doubt the regulators are eager to embrace a currency regime that reduces even further their control over domestic financial stability.
caixinglobal.com/2021-06-10/top…
China and how this will make it harder to impose domestic financial stability. I really doubt the regulators are eager to embrace a currency regime that reduces even further their control over domestic financial stability.
caixinglobal.com/2021-06-10/top…
8/11
Those who think that digital RMB will become a dominant currency for international trade and settlement must also believe that Beijing is willing to give up capital controls permanently and sharply limit its ability to control the domestic financial system.
Those who think that digital RMB will become a dominant currency for international trade and settlement must also believe that Beijing is willing to give up capital controls permanently and sharply limit its ability to control the domestic financial system.
9/11
More generally, the idea that a widely-used currency brings economic benefits is simply not true. It brings tremendous economic costs, not the least of which is the loss of control (as a senior PBoC official recently acknowledged).
caixinglobal.com/2021-06-24/opi…
More generally, the idea that a widely-used currency brings economic benefits is simply not true. It brings tremendous economic costs, not the least of which is the loss of control (as a senior PBoC official recently acknowledged).
caixinglobal.com/2021-06-24/opi…
10/11
I expect the role of USD globally will eventually decline, not because it is being replaced by the RMB (or the euro or the yen, as was widely anticipated not so long ago, and for many of the same wrong reasons) but because Washington will eventually recognize the cost...
I expect the role of USD globally will eventually decline, not because it is being replaced by the RMB (or the euro or the yen, as was widely anticipated not so long ago, and for many of the same wrong reasons) but because Washington will eventually recognize the cost...
11/11
to the US of the globalized dollar and will move unilaterally to limit its role. When that happens, either the USD will be partially replaced by a synthetic currency or, more likely, the era of huge imbalances made possible by unfettered global capital will end.
to the US of the globalized dollar and will move unilaterally to limit its role. When that happens, either the USD will be partially replaced by a synthetic currency or, more likely, the era of huge imbalances made possible by unfettered global capital will end.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
