For now, piecemeal efforts, like a pilot program allowing companies in Shanghai to use renminbi as a trade settlement currency rather than dollars or euros, are a way to test the waters.
Including the yuan in the SDR basket can be thought of as the IMF's Good Housekeeping "Seal of Approval," signalling that it is ready for the big time as a global investment and trade settlement currency.
Given that many of those deals just shuffle cash between Chinese companies and their subsidiaries in Hong Kong, there is much less than meets the eye to the yuan's stature as a trade-settlement currency.Even more telling is the yuan's standing as an investment currency.
Will financial institutions around the world wind up using Bitcoin as the global settlement currency?
Third, promoting the yuan as a settlement currency will not solve China's problem of external imbalances.
Bitcoin, despite its ongoing internal strife, is very useful as permissionless global money, and has a legitimate shot at becoming a global reserve and settlement currency.
Either way, the operator maintains bitcoin gaming profits or player inventory in bitcoin with a need to determine a settlement currency.
If, instead of funding nostro/vostro accounts in the settlement currency before making payments, banks used XRP as a bridging currency, would this eliminate large balances in nostro/vostro accounts?
Provided there are liquid markets in the settlement currency, funding nostros can be done on the day of payment, or even later if the correspondent bank doesn't mind the vostro going overdrawn.
It is far too unstable to be used as a major settlement currency and payment method, and its record of bugs and errors makes its use for legal contracts questionable.
