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Comment by refurb | Hacker News Reader

The yuan is not freely exchangeable and doesn't float. How can a currency like that be the world's reserve?

Would you agree to sell $10M in oil if you got paid in yuan that you're not sure you can convert into another currency? Where you're not sure the Chinese government won't change it's mind and dramatically change the exchange rate?

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Why are you asking for my opinion when other sovereign countries are the ones issuing yuan bonds and migrating away from the dollar?

Issuing bonds and “moving away” aren’t the same as becoming the world’s reserve currency.

People are getting confused.

It’s like saying because I shopped at Walmart last week, Walmart will become the sole supplier of everything I buy.

A lot of transactions moving away does not mean moving away entirely to a sole new supplier.

Even a 10% decline in dollar usage is "moving away". Bit by bit, the rest of the world starts using alternatives. That's how the British pound went down from global reserve to 4% of reserves. It took 70 years for this gradual decline.

You started with transactions then moved to reserves.

Tell me the missing piece.

The missing piece is that transactions lead to reserves.

No they don't. A business selling products or services and receiving a foreign currency, doesn't lead to higher foreign reserves for the country.

Care to try again?

I don't want to try again for someone who doesn't want to research for themselves how foreign countries accumulate reserves. Hint, you literally explained it.

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