One of the world’s top energy importers, China, is set to roll out a yuan-denominated oil contract as early as this year. Analysts call the plan, announced by Beijing in September, a huge move against the dollar's global dominance.
The so-called petro-yuan is a “wake up call” for investors who haven’t paid attention to the Chinese plans, according to the head of Graticule Asset Management Asia Adam Levinson, as quoted by Bloomberg.
Earlier this year, the Chinese government announced plans to start a crude oil futures contract priced in yuan and convertible into gold. The contract will enable the country's trading partners to pay with gold or to convert yuan into gold without the necessity to keep money in Chinese assets or turn it into US dollars.
The new benchmark will reportedly allow exporters, such as Russia, Iran or Venezuela to avoid US sanctions by trading oil in yuan.
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