Sunday, November 19, 2017

IMF Executive Director Talks Renminbi

A couple of additional articles here that point out that any expansion of the Chinese currency in regards to its role in the world is likely to be a gradual process. Below are links to the two articles and then an excerpt from each one.


IMF Executive Director Talks Renminbi

“China has made great achievements in liberalizing its financial sector,” Jin said. “But there is still a long way to go before it is fully internationalized.”

. . . .

“The inclusion of the renminbi into the SDR is truly a milestone for China to internationalize its currency, but it’s only one of the first steps,” Jin said.

The Rise of the Renminbi

"Beijing has worked hard to encourage the international use of the renminbi, which accounts currently for around one percent of the foreign exchange reserves held by the world's central banks."

. . . .

"To be a safe haven, a currency has to be traded in deep and liquid markets; during a crisis, investors value nothing more than liquidity. Moreover, for a currency to act as a safe haven, investors need to feel confident that there won't be unpredictable changes in the rules of the game.

In the country that controls that currency, the central bank and financial regulators must be insulated from politics; they should be legally and financially independent. Contract enforcement must be evenhanded, treating residents and foreign investors alike. Finally, the system of government must feature institutional checks and balances on the arbitrary decision-making power of the executive."

Added news notes: 

Earlier this year we covered the ill fated attempt by the Allocated Bullion Exchange (ABX) to launch BullionCoin. While that venture did indeed fall apart, the ABX did just announce a partnership with European Commodity Clearing to offer gold and silver trading in the EU. Here a quote from the news release:

“We are very excited about the partnership with ECC”, says Eric Maine, Chief Strategy Officer of ABX. “Bringing one of the largest financial markets onto an electronic, institutional trading platform which is centrally cleared by ECC and their 23 global clearing banks and 400+ member firms, is a major step for both ABX and for the precious metals industry. ABX and ECC’s efficient, cost-effective, transparent and robust centrally cleared model is what the global physical precious metals industry and related regulatory bodies have been waiting for, and represents a superior and viable alternative to the opaque, legacy, unallocated market.”

In other gold related news:
Monday (11-20) is the anticipated launch date for London based Glint which has attracted investment capital from some high profile investors

We will get our first look at how Glint is designed to work in a Q&A style interview with Glint CEO Jason Cozens he provided for readers of this blog (will post to the blog at 7:30 am Monday 11-20).

This is a great interview with a lot of good information on how Glint will work. Here is a quote from the Glint news release on its investors:

"NEC Capital Solutions and TOCOM join a number of high-profile individuals already invested in facilitating the global currency. These include Haruko Fukuda, former CEO of the World Gold Council and non-executive director of Investec Bank; Oliver Bolitho, formerly chairman of Goldman Sachs Asset Management Asia; Hugh Sloane, co-founder of asset manager Sloane Robinson; and Lord Flight Of Worcester, formerly of Guinness Flight Global Asset Management. Bray Capital, the eclectic venture capital group specialising in start-ups and growing businesses, has also invested in Glint."

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