The Potential Dominance of Renminbi as an International Reserve Currency

The spread of the global corona virus and geopolitical risks in recent years have directly led to the short-term economic recession in the United States. The Biden government's fiscal deficit and national debt have repeatedly hit record highs, which are likely to cause inflation and price fluctuations. This study focus on the key nature of the international reserve currency and its trend of excessive privilege of the US dollar whilst facing the economic rise of China. Through the macro-control plan of the New Silk Road, the Renminbi is gradually consolidating and developing emerging economic and trade regions in Southeast Asia and Central Asia. This paper also analysis the opening of China's financial market and the continuous inflow of foreign capital, it is expected to increase the use of the Renminbi, and it is predicted that the Renminbi will replace the British pound and the Japanese yen in 2030 and become the world's third largest foreign exchange reserve currency. But even if China is accelerating the implementation of digital Renminbi, the major difficulty of replacing the US dollar lies in the Chinese government itself, i.e., the monetary policy and the number of restrictions that apply on its currency circulation.