For yuan to be the new dollar, China needs democracy: Eichengreen
University of California scholar 'struck' by resilience of American currency
Professor Barry Eichengreen says every true international and reserve currency in history has been a currency of a political democracy or a republic, with real political checks and balances. (Photo courtesy of the International Monetary Fund)
BERKELEY, U.S. -- The world has seen multipolar monetary systems before, and there can be more than one dominant currency, said Barry Eichengreen, professor of economics and political science at the University of California, Berkeley, in a Nikkei interview.
The Chinese yuan, or renminbi, will inevitably play a larger role in the international system, but every true international and reserve currency in history has come from a democracy or republic with real checks and balances, Eichengreen said.