This doesn’t mean that other currencies are not being vigorously policed, but there is a common view that the intensity with which US authorities are interpreting and enforcing rules preventing money laundering and terrorist funding is a couple of steps above and beyond other authorities.
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| • Clear & present danger • European banks weigh up US Dollar clearing options |
Stories abound of US authorities making regular and unannounced visits to US banks and the New York offices of major foreign banks, where up to 20 regulatory officials crawl and pick over transactions day-in-day-out. This type of oversight, and on that scale, just isn’t happening elsewhere.
But what’s interesting is not the impact such intense scrutiny of the dollar is having on trade, investment and payment volumes in the currency, it is instead what this could potentially mean for the use of other global currencies, and one in particular.
The renminbi has risen meteorically as a world payments and trade currency in the past three years alone, overtaking 22 other currencies to break into the top 10 most-used currencies for payments and trade settlement for the first time last year.