Digital Yuan Reshaping Global Trade And Power | G. Valiachi & S. Murugan

The global financial order is witnessing a seismic shift, and at its epicenter is China’s digital yuan. The recent launch of the Digital RMB Cross-Border Settlement System (CIPS) by the People’s Bank of China (PBoC) is more than just a technological breakthrough—it is a geopolitical maneuver with far-reaching implications for global trade, financial sovereignty, and the dominance of the US dollar.

The Digital Yuan’s rise is not merely a financial evolution

—it is a recalibration of global power structures.

 

Will the rest of the world, particularly the West, adapt to this new reality, or will they be left navigating a financial ecosystem where China dictates the rules? One thing is certain: the era of uncontested dollar dominance is coming to an end. The world must prepare for a future where digital currencies, led by China's digital yuan, reshape global finance in ways we are only beginning to comprehend.

A Disruptive Technological Edge: For decades, international transactions have relied on the SWIFT system, where dollar-dominated settlements often take 3-5 days to clear, involving multiple intermediary banks and high transaction costs. China's digital RMB, powered by blockchain technology, has completely upended this model. With settlement times reduced to just seven seconds and handling fees slashed by 98 per cent, the efficiency gains alone are compelling enough for emerging markets and strategic trade partners to make the switch. The first successful real-time settlement between Hong Kong and Abu Dhabi using digital RMB has already demonstrated its disruptive potential. By bypassing SWIFT and eliminating reliance on correspondent banks, China has effectively engineered an alternative financial network—one that reduces the influence of US-dominated monetary systems and reshapes the global trade paradigm.

» Settlement times reduced to just seven seconds and handling fees slashed by 98 per cent. «

Digital RMB vs SWIFT.

Redefining Financial Sovereignty: The ramifications of this development extend beyond mere efficiency. For years, the US has wielded its control over the SWIFT system as an instrument of economic coercion, particularly through sanctions. The digital RMB offers an alternative, allowing countries under Western financial pressure—such as Iran and Russia—to conduct transactions without US oversight. This is already materializing: six ASEAN nations, including Malaysia and Singapore, have incorporated the RMB into their foreign exchange reserves, and Thailand has completed its first oil trade settled in digital yuan.

The Global De-dollarization Trend: The cross-border RMB settlement volume in ASEAN exceeded 5.8 trillion yuan in 2024, a staggering 120 per cent increase from 2021. As China strengthens its digital payment network, the US dollar’s role as the world’s reserve currency faces an existential challenge.

» Over 87 per cent of the world’s countries are now digitally integrated with the RMB settlement system. «

China’s Digital Silk Road expands its influence through digital infrastructure projects.

Strategic Integration: The digital yuan’s role extends beyond financial transactions; it is a foundational pillar of China’s broader economic expansion strategy. The Belt and Road Initiative (BRI), already a monumental undertaking spanning over 140 countries, now has a digital counterpart in the “Digital Silk Road.” By integrating the digital RMB with Beidou satellite navigation and quantum communication, China is creating a seamless trade infrastructure that enhances efficiency by 400 per cent. This convergence of digital currency and physical trade infrastructure fundamentally alters the balance of economic power. European car manufacturers are already settling Arctic route freight costs in digital RMB, and Middle Eastern energy traders have reduced settlement costs by 75 per cent. If this momentum continues, the dollar-based financial order could soon become a relic of the past.

The Future of Global Finance: With over 87 per cent of the world’s countries now digitally integrated with the RMB settlement system, China has successfully built a financial architecture that challenges traditional banking norms. The total volume of cross-border digital RMB transactions has already surpassed $1.2 trillion, and this figure is set to grow exponentially as more nations join the digital currency bridge test. Meanwhile, the US and Europe remain embroiled in regulatory debates over digital currency frameworks. The Federal Reserve’s hesitancy on Central Bank Digital Currencies (CBDCs) and the European Central Bank’s slow progress on the digital euro underscore the West’s lack of preparedness for this revolution. While Washington deliberates, Beijing executes.

Quoted from:
Ganesh Valiachi and Soundarya Murugan (March 29, 2025) - The End of the Dollar Era? 

China’s Digital Yuan Is Reshaping Global Trade And Causing Financial Power Shift.

Rare Earth Retaliation: China Chokes America’s War Machine | Gerry Nolan

China just halted exports of key rare earths to the US, slapping export controls on seven categories of critical metals and magnets used in everything from EVs and smartphones to fighter jets, missiles, and drones, delivering a surgical strike to the spinal cord of America’s supply chain. Welcome to the new trade war: geoeconomic strangulation, without firing a shot.

China halts export of key rare earth minerals and develops a ‘regulatory system’ 

to completely block certain minerals from reaching specific US companies.

 

[...] You want to slap 145% tariffs on our goods? Fine. But good luck assembling a single Javelin, F-35, or iPhone without our dysprosium, terbium, and neodymium. China controls over 90% of global rare earth production. Washington just remembered that the hard way. This isn’t just a tit-for-tat move. It’s strategic economic warfare, targeting the soft underbelly of US dominance: the illusion that it can wage hybrid war without being vulnerable itself.

» Dumber than a sack of bricks. «

And now? The US is scrambling: Talking about deep-sea mining, rushing to build stockpiles, and begging Australia and Canada to step up. Canada, eh? Too little, too late. You spent three decades offshoring everything, and now your empire can’t build a toaster, let alone a missile guidance system, without Beijing’s blessing. Ok, maybe you can build a toaster, to be fair. [...] Every chip, every drone, every smart weapon in the Pentagon’s closet runs on components China can choke off in 48 hours. Trump called it “Liberation Day.” 

 

Quoted from:

Gerry Nolan (April 13, 2025) - Rare Earth Retaliation: China Chokes America’s War Machine.

The Last Tariff: China Ended the US’s Trade War With a Whisper | Gerry Nolan

It happened with no fanfare. No saber-rattling. No choreographed press conference. Just one quiet statement from Beijing’s Customs Tariff Commission: "Tariffs on US goods will rise to 125% — and this will be our final adjustment. Regardless of future US actions, China will no longer respond." In Washington, they saw a concession. In reality? Beijing walked away from the last imperial leverage DC had left.

 » Tariffs on US goods will rise to 125% — and this will be our final adjustment.
Regardless of future US actions, China will no longer respond. «
China's Customs Tariff Commission, April 11, 2025.

In Trump's chaotic circus, tariffs are sold as economic patriotism, blunt-force trauma marketed as “tough negotiation.” But tariffs are the last resort of a hollowed-out empire that no longer produces, competes, or innovates, only thinks it can still dictate.

Trump’s latest move, slapping a 125% tariff on Chinese goods, was meant to flex dominance. Beijing waited, matched it perfectly, then froze the board. "There is no possibility of market acceptance of US goods in China." Translation: “We don’t need you anymore.” No further hikes are necessary. The US is de facto cut off from the colossal Chinese market. That's not de-escalation. That's de-dollarization in practice. Geoeconomic Aikido, using the empire’s aggression to accelerate the break from it.

» China never bluffs—and we see through those who do. « 

Chinese Embassy in the US, April 10, 2025.

Washington still believes in a world that no longer exists. It thinks it can dictate trade terms while running trillion-dollar deficits, threaten its way into solvency while its factories rust, and that China will forever tolerate economic warfare just to retain access to Walmart shelves and US Treasury bonds, bonds that are a ticking time bomb for the hollowed empire.

But that world is gone. China has reoriented trade through Belt & Road. It’s fortified currency alliances with BRICS+, hardened internal markets, and invested across the Global South. Most importantly, it has shifted away from Western export dependency.

» Even if the US imposes even higher tariffs, it would no longer make economic 

sense and ultimately go down as a joke in world economic history. « 

Chinese Embassy in the US, April 11, 2025.

So when Beijing says, “we will ignore further US tariff moves,” it’s not a concession. It's sovereignty. The US has already been priced out, there’s no need for more theaters. This is the reckoning of a rentier empire built on financial parasitism, not production.

The definition of narcissism.

America doesn't have the tools to win a trade war, it doesn't make the tools anymore. Wall Street eviscerated its industrial base. Labor was deskilled by decades of outsourcing. Infrastructure crumbled while $10 trillion burned in forever wars. Trump’s 125% tariff isn’t policy, it’s a symptom. An empire in late stage declined. The power of Beijing’s response isn’t the tariff, it’s the refusal to respond again. No escalation. No panic. Just a clean break from a failing system.

A message to the Global South: “We won’t be dragged into Washington’s chaos. We won’t fight over a burning house. We’ll build new ones.” It's multipolar maturity. Let the US isolate itself, tariff its own supply chains, and raise rates until its middle class fractures. Beijing will trade in yuan with the Global Majority, while America tariffs itself into irrelevance.

 » The reckoning of a rentier empire built on financial parasitism, not production. « 

Markets have lost nearly $6 trillion net since February, despite brief rebounds. Wall Street knows: this isn’t 2001. China isn’t cowering. It now holds the keys to rare earths, battery tech, and semiconductors. Trump framed the tariffs as punishment for “ripping off the USA.” 

 

But who really gutted America’s industries? China? Or Goldman Sachs? Who looted pensions, turned homes into hedge fund fodder, and spent trillions on wars that only enriched Raytheon and BlackRock? The real theft wasn’t done in Beijing. It was done in boardrooms, think tanks, and Senate halls under the banner of “free markets” and “security.”

 » There is no possibility of market acceptance of US goods in China. «

The US is de facto cut off from the colossal Chinese market.

This moment isn’t the climax of a trade war. It’s the end of illusion, that the US can sanction, tariff, and bully its way to eternal dominance. Beijing just called time. 125% is the ceiling. From here forward, they won’t play the empire’s game. They're building a new one, with bricks, not bombs. With real trade, not tribute. With allies who don’t need threats to stay loyal.

Quoted from:
Gerry Nolan (April 12, 2025) - The Last Tariff: How China Ended the Empire’s Trade War With a Whisper.

 

 

Trump economic counselor Peter Navarro accuses China of killing "1 million Americans with fentanyl" and "destroying over 60,000 American factories and 5 million manufacturing jobs". Who prescribes opioids to millions of Americans, leading to addiction? Did China choose to ship these factories offshore and deindustrialize for tax evasion and cheap labor?

See also:

 Lu QiYuan (March 15, 2025) - The US Will Now Cannibalize Its Own Allies and Vassals to Survive.

Ministry of Foreign Affairs of the People's Republic of China (February 20, 2023) - US Hegemony and Its Perils.

And, of course, no one understands tariffs—only Trump does.

Don't Think That What's Now Happening Is Mostly About Tariffs | Ray Dalio

At this moment, a huge amount of attention is being justifiably paid to the announced tariffs and their very big impacts on markets and economies while very little attention is being paid to the circumstances that caused them and the biggest disruptions that are likely still ahead. 

 

Don't get me wrong, while these tariff announcements are very important developments and we all know that President Trump caused them, most people are losing sight of the underlying circumstances that got him elected president and brought these tariffs about. They are also mostly overlooking the vastly more important forces that are driving just about everything, including the tariffs.  

 The 80 Year Big Debt Cycle.

The far bigger, far more important thing to keep in mind is that we are seeing a classic breakdown of the major monetary, political, and geopolitical orders. This sort of breakdown occurs only about once in a lifetime, but they have happened many times in history when similar unsustainable conditions were in place. More specifically:

 

1.  The monetary/economic order is breaking down because there is too much existing debt, the rates of adding to it are too fast, and existing capital markets and economies are supported by this unsustainably large debt. The debt is unsustainable because the of the large imbalance between a) debtor-borrowers who owe too much debt and are taking on too much debt because they are hooked on debt to finance their excesses (e.g., the United States) and b) lender-creditors (like China) who already hold too much of the debt and are hooked on selling their goods to the borrower-debtors (like the United States) to sustain their economies. 

 

The Art of War vs The Art of the Deal.

There are big pressures for these imbalances to be corrected one way or another and doing so will change the monetary order in major ways. For example, it is obviously incongruous to have both large trade imbalances and large capital imbalances in a deglobalizing world in which the major players can't trust that the other major players won't cut them off from the items they need (which is an American worry) or pay them the money they are owed (which is a Chinese worry). This is a result of these parties being in a type of war in which self-sufficiency is of paramount importance. Anyone who has studied history knows that such risks under such circumstances have repeatedly led to the same sorts of problems we're seeing now. 

 

So, the old monetary/economic order in which countries like China manufacture inexpensively, sell to Americans, and acquire American debt assets, and Americans borrow money from countries like China to make those purchases and build up huge debt liabilities will have to change. These obviously unsustainable circumstances are made even more so by the fact that they have led to American manufacturing deteriorating, which both hollows out middle class jobs in the US and requires America to import needed items from a country that it is increasingly seeing as an enemy. In an era of deglobalization, these big trade and capital imbalances, which reflect trade and capital interconnectedness, will have to shrink one way or another. 

 

  From Trade War to Financial War.

Chinese Embassy in the US, April 11, 2025.

Also, it should be obvious that the US government debt level and the rate at which the government debt is being added to is unsustainable. (You can find my analysis of this in my new book How Countries Go Broke: The Big Cycle.)  Clearly, the monetary order will have to change in big disruptive ways to reduce all these imbalances and excesses, and we are in the early part of the process of it changing. There are huge capital market implications to this that have huge economic implications, which I will delve into at another time.  

2.  The domestic political order is breaking down due to huge gaps in people's education levels, opportunity levels, productivity levels, income and wealth levels, and values—and because of the ineffectiveness of the existing political order to fix things. These conditions are manifest in win-at-all-cost fights between populists of the right and populists of the left over which side will have the power and control to run things. This is leading to democracies breaking down because democracies require compromise and adherence to the rule of law, and history has shown that both break down at times like those we are now in. History also shows that strong autocratic leaders emerge as classic democracy and classic rule of law are removed as barriers to autocratic leadership. Obviously, the current unstable political situation will be affected by the other four forces I’m referring to here—e.g., problems in the stock market and economy will likely create political and geopolitical problems.  
 

 » Tariffs on US goods will rise to 125% — and this will be our final adjustment.
Regardless of future US actions, China will no longer respond. «
China's Customs Tariff Commission, April 11, 2025.

3.  The international geopolitical world order is breaking down because the era of one dominant power (the US) that dictates the order that other countries follow is over. The multilateral, cooperative world order the US led is being replaced by a unilateral, power-rules approach. In this new order, the US is still largest power in the world and is shifting to a unilateral, "America first" approach. We are now seeing that manifest in the US led trade-war, geopolitical war, technology war, and, in some cases, military wars.  
 

4.  Acts of nature (droughts, floods and pandemics) are increasingly disruptive, and
 

5.  Amazing changes in technology such as AI will be highly impactful to all aspects of life, including the money/debt/economic order, the political order, the international order (by affecting interactions between countries economically and militarily), and the costs of acts of nature. 

 

 Shadowboxing in a hall of mirrors:

On April 12, Trump excluded smartphones and electronics
from his April 9, 125% tariff on China.

Changes in these forces and how they are affecting each other is what we should be focusing on. For that reason, I urge you to not to let news-grabbing dramatic changes like the tariffs draw your attention away from these five big forces and their interrelationships, which are the real drivers of Overall Big Cycles changes. 

 

Ray Dalio, founder of the world’s largest hedge fund, says mismanaged global tariffs and economic

policies could push the US economy, already nearing recession, into a far worse crisis, 

while appearing on NBC, April 13, 2025.

[...] I also urge you to think about the interrelationships that are critically important. For example, think about how  Donald Trump's actions on tariffs will affect 1) the monetary/market, economy order (it will be disruptive to it), 2) the domestic political order (it will likely be disruptive to it as it will probably undermine his support), 3) the international geopolitical order (it will be disruptive to it in many obvious ways that are financial, economic, political, and geopolitical) 4) climate (it will somewhat undermine the world’s ability to deal with the climate change issue effectively), and 5) technology development (it will be disruptive in some positive ways to the US, like bringing more technology production into the US, and in some harmful ways, like being disruptive to the capital markets that are needed to support technology development and in too many other ways to innumerate here.)
 

Quoted from:
Ray Dalio (April 7, 2025) - Don't Make the Mistake of Thinking That What's Now Happening is Mostly About Tariffs.

[Ray Dalio is the founder, CIO mentor, and member of the Bridgewater Board.]

 

See also:
Ray Dalio (March 26, 2025) - How Countries Go Broke: The Overall Big Cycle.

Lu QiYuan (December 8, 2024) - Scott Bessent's Covert MAGA Strategy for Trump 2.0.  

Trump commenting on how much money his billionaire friends made when he paused

tariffs on Wednesday, April 9: "He made $2.5 billion today, and he made $900 million". 

Corruption, insider trading, or just good timing and coincidence? 

April 10, 2025.

Applied MAGA-nomics: The Future of American Re-Industrialization

 

Bright Days Ahead.

 

 

Make America Great Again! 

 

 

 

 

Please, It’s Too Much Winning. We Can't Take It Anymore, Mr. President!

 » We're gonna win so much that you may even get tired of winning! You’ll say:

"Please, please, it’s too much winning. We can't take it anymore, Mr. President. It’s too much!" 

And I’ll reply: "No, it isn’t! We have to keep winning, we have to win more! «

 

 

POTUS 45 | 47 

 

» The US is playing a zero-sum game. China is committed to opening ever wider to the world. « 

  

» May he continue to work hard for the ultimate mission entrusted to him by the Party. « 

 

 » Thursday and Friday were 2 consecutive days in the S&P of more than -4.5% declines,

and the NASDAQ fell more than -5%. This only happened during huge crashes. What's next? «

 

» There’s a fantastic research paper called “Buffett’s Alpha”, which analyzes the “factors” that Buffett tilts towards. Buffett is exposed to the Betting-Against-Beta and Quality-Minus-Junk factors, with 1.7x leverage. I highly recommend you read this. «

 

  SubuTrade: Markets Report. Bear Markets & Trade Wars, April 05, 2025.

 

» Hurst Cycles: Short term cycles - 2-3 days higher for wave 4 and 20d high then another 2-3 days lower for wave 5

and 20d low will fit perfect. I think we had a 20w high late March and are now heading lower into the 20w low. «
Krasi: Weekly Preview, April 5, 2025.

 

Philip Hopf (April 3, 2025) - Is Trump crashing the world economy now? (video)

 

See also:
TPR (April 4, 2025) - 10-Day Cycle Expected to Bottom on Tuesday, April 8, Around 8:30 a.m.

We Support Trump’s Tariffs. Here Is Why | Dimitri Simes Jr.

We support Trump’s tariffs. They are beneficial for humanity. They will accelerate the collapse of the Globalist American Empire.

 

Economic Self-Sabotage: Tariffs raise costs for US consumers and businesses, resulting in higher prices for everything from cars to electronics. This impacts the average American's wallet, shrinking purchasing power and slowing growth. A weaker economy means less leverage on the world stage.

» Trump’s tariffs are beneficial for humanity. They will 

accelerate the collapse of the Globalist American Empire. «

Alienating Allies: Imposing 25% tariffs on Canada and Mexico, or 20% on the EU, doesn’t exactly convey a “team player” mentality. Allies are already retaliating—China’s counter-tariffs and Europe’s threats are just the beginning. When your friends abandon you, your influence diminishes rapidly.

The formula Trump's team used to calculate tariffs. 

 Brilliant minds at work: Tariffs = Trade Deficit/US Imports.

Deindustrialized Reality: The US is no longer the manufacturing giant it once was. Decades of offshoring have gutted its industrial base. Tariffs can’t protect industries that barely exist anymore. Steel mills and factories won’t magically return. Instead, higher costs will simply burden the service-heavy economy that remains.
 

» Damn smart penguins. «

Handing Rivals a Win: China is eager to capitalize. Tariffs push global trade away from the US, and Beijing is ready to fill the void, strengthening ties with Asia, Africa, South America, and even Europe. The more the US isolates itself, the more rivals like China and Russia gain ground.
 

 » The more the US isolates itself, the more rivals gain ground. «

Dollar’s Status at Risk: The US dollar’s position as the world’s reserve currency relies on trust and trade. Tariffs breed chaos, retaliation, and currency wars, potentially leading to a push by BRICS nations to abandon the dollar. If this happens, America’s financial power could crumble—especially considering the historically high price of gold.
 

 » History shows that empires don’t survive self-inflicted wounds like these. «

Overreach and Collapse: Empires fall when they overextend. Tariffs are a gamble; Trump is betting on short-term gains, but the long-term consequences could be a fractured trade system and a US too weakened to lead. History shows that empires don’t survive self-inflicted wounds like these.
 

Trump’s tariffs might seem like a bold move to “Make America Great Again,” but they could end up being a wrecking ball to its global influence. The empire is already on shaky ground, and tariffs could be the final push that sends it crashing down.

Dimitri Simes Jr., April 3, 2025.  

 

  

  

» The problem is that Trump will be blamed for the recession/depression
the world is headed into, which will not bottom until August 25th, 2028. «

Martin Armstrong (April 2, 2025) - Trump, Tariffs, and Liberation Day.

 

Treasury Secretary Scott Bessent breaks down Trump's Tariff
Plan and its impact on the middle class, April 4, 2025.

 

 » They’ve all been living in our house. Driving our car. They open our fridge, eat our food. 

They’ve taken advantage of us. You have to pay. « Unless you are Israel.
US Secretary of Commerce Howard Lutnick, April 6, 2025.

Medvedev Watching the River Flow

» As it is, Russia barely does any trade with the US and EU, nearly all of it is under sanctions. Yet, our economy is growing 3% now. 

We’ll take the advice of Lao Tzu and sit by the river, waiting for the body of the enemy to float by.
The decaying corpse of the EU economy. «

 

Dmitry Medvedev, April 3, 2025.

A significant number of European politicians have succumbed to acute Russomania (also known as Russophobia)—a psychiatric disorder stemming from a bipolar affective exaggeration of Russia’s influence on the lives of Europe and Europeans. The condition typically alternates between two distinct phases: manic and depressive.

The manic stage is characterized by motor agitation, aggressiveness, and a tendency to provoke and attack stronger opponents without assessing one’s actual capabilities against the target of the attack. Sometimes, it ends in uncontrolled urination and defecation. Examples of patients in the manic stage include Macron, Starmer, Stubb, and several other European politicians.

 

From Third Reich to European Union.

The depressive phase is characterized by melancholy, emotional and physical fatigue, eating disorders, hypochondria, and self-harm. A patient in the depressive stage of Russomania may harm themselves, including self-sterilization (self-castration). At present, this stage is more commonly observed in women (Ursula von der Leyen, Kaja Kallas) or in hermaphrodites suffering from drug addiction (patients Zelensky, Saakashvili).

Treatment is symptomatic. Traditional medications are generally ineffective. The best therapeutic effect has been observed with the combined use of strong sedative drugs such as "Kalibr," "Onyx," "Iskander," and the powerful multi-component tranquilizer "Oreshnik." In particularly severe cases, nuclear neuroleptics such as "Yars" and "Sarmat" must be used.

 

Dmitry Medvedev, March 31, 2025.

 

See also:

 Martin Armstrong (March 21, 2025) - Europe's Date with Destiny: Collapse by 2029 is Inevitable.

Martin Armstrong (March 1, 2025) - Europe Will Go to War around May 15, Lose, and Euro Will Become Extinct.

Alex Krainer (March 18, 2025) - The Tragedy of Europe's Idiocracy.