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Growing European preference for China's currency is risky

IMF decision to increase its yuan reserves has significant geopolitical implications

| Europe
Europe's support for wider global use of the yuan undermines future sanctions in case of a conflict over Taiwan.   © Imaginechina/AP

Nicola Casarini is senior associate fellow, Istituto Affari Internazionali, Rome and a global fellow at the Wilson Center, Washington DC. Rita Fatiguso is senior China correspondent at Il Sole 24 Ore, Italy's financial daily.

The yuan received a boost last month when the International Monetary Fund increased the share of the Chinese currency in the Special Drawing Rights, an international reserve asset that also includes the dollar, the euro, the pound and the yen.

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