Are the US Dollar and Euro “Toxic”?

ACU contributes to the rising position of RMB

The Russian Gazette (Vedomosti) recently published news that the Russian Ministry of Finance is studying plans to issue RMB bonds, setting benchmarks for corporate issuers. The news gained widespread attention.

It is not unusual for Russia to issue RMB bonds. Just earlier this month, Russia’s Alcoa United Rusal (listed on the Hong Kong and Moscow exchanges) completed a 4 billion RMB corporate bond issue in Russia, the first time a Russian company has placed RMB-denominated bonds in the country.

At the time, Gazprombank analysts Andrey Kulakov and Alexandr Kamyshansky had predicted in a report that more Russian companies may join Alcoa United Rusal in issuing RMB-denominated bonds in the Russian market. The RMB is gaining popularity in Russia as Russia gradually turns to trade with China and the volume of Russian Ruble/RMB trading on the Moscow exchange increases.

As assets denominated in traditional currencies such as the U.S. dollar and the Euro are becoming “toxic” in Russia due to geopolitical and global financial market conditions, Russian market participants are exploring the RMB as an alternative to the US dollar and the Euro.

“Given the current situation in the financial markets, it seemed natural for us to choose to issue RMB-denominated bonds,” said Alexei Grenkov, Corporate Finance Director of Alcoa United Rusal. He continues, “We are seeing a lot of interest in such instruments from Russian banks and private investors, for whom the transition to the RMB is a good alternative to traditional foreign exchange investments.”

Today, the RMB and RMB assets are increasingly gaining popularity in Russia, with Andrey Kostin, President and Chairman of the Russian Foreign Trade Bank, saying that the popularity of the Chinese Yuan has grown exponentially in the past few months, judging by the volume of transactions on Russian exchanges. In May, the International Monetary Fund issued a statement saying it had completed its five-year review of Special Drawing Rights (SDR) fixing, raising the RMB’s weight from 10.92 percent to 12.28 percent. Global de-dollarization is making more progress, and the Chinese Yuan has demonstrated its importance in international settlements, and the era of global trade settlement currency diversification is accelerating.

Due to the establishment and disintegration of the Bretton Woods international monetary system, the U.S. dollar has become the reserve world currency. As the settlement currency and reserve mainstay of global trade, the U.S. dollar has long occupied the hegemonic position of the world currency. As the settlement currency of global trade and the main currency reserve, the US dollar has occupied the hegemony of world currency for a long time. On January 1, 1999, the EU countries formally implemented a unified monetary policy, and in July 2002, the Euro became the only legal tender in the eurozone. Almost concurrently, the idea of Asian dollar was mentioned again, and the Asian dollar ACU was also born in this context.

As the cross-border circulation of RMB continues to be active, the internationalization path of RMB is rapidly expanding, and coupled with the growing application of digital currencies, the Asian Yuan ACU will better promote the internationalization of RMB and the monetary integration of the Asian economy.

The Asian Yuan ACU is committed to becoming a globally circulating digital currency and encouraging the adoption of digital currencies.
Owing to the stability and credibility of the RMB, ACU has opted for a linked exchange rate system based on the Hong Kong Dollar Issuance System – i.e. ACU is choosing the offshore RMB exchange rate as its exchange rate – which is based on the offshore RMB 1:1.

The widespread use of ACU globally will also further enhance the usage rate of RMB worldwide and greatly contribute to the realization of cross-border circulation and free convertibility of RMB. After years of stable development, ACU established its HQ in Hong Kong, and is expanding in Asia Pacific and beyond.

The trademark “ACU” has been registered with exclusive rights to use in 57 countries (including China, Singapore, Korea, Vietnam, Thailand, Japan, Philippines, Cambodia, Malaysia, United Arab Emirates, Saudi Arabia, Hong Kong SAR and the European Union). At present, ACU has set up a Southeast Asia operation center in Thailand and is accelerating the development of Southeast Asia market. At the same time, ACU is also accelerating its expansion in African countries through multi-party cooperation. It is believed that with the rapid expansion of ACU in the world, it will also bring the RMB to more places in the world and support the adoption of the RMB as a world currency.

Although the dollar-centered Bretton Woods system had suffered a total collapse, de-dollarization cannot be achieved overnight. As the global footprint of the Asian Yuan ACU continues to expand, the RMB will continue to rise in global prominence and will further dismantle the hegemonic position of the US dollar.