According to Columbia University economist Jeffrey Sachs, China's yuan could be on an equal footing with the US dollar as a global currency in as little as a decade earlier than most people would think.
Institutions should veer away from their reliance on the US dollar in the near future, Sachs said, with multiple currencies including the yuan and euro being used to resolve international trade, assets of global central banks, and financing by bond issues.
"I think we are going to move from a dollar-based settlement system to a multi-currency settlement system where the dollar, euro, and yuan are all used for international settlements," the prominent American macroeconomist disclosed.
Sachs was a former special adviser to the United Nations Secretary-General and his strategies were used to improve situations to a number of economically troubled countries.
Sachs has consulted hundreds of heads of state and government on economic planning around the world over the past three decades and was the chief organizer of the debt reduction campaign in Poland around the end of the cold war.
Sachs has been forecasting the downfall of the US dollar for some years, but his predictions have grown stronger since US President Donald Trump's victory in 2016, whose proposals he claimed will see the currency "displaced."
The biggest reason to expect financial "de-dollarization" is attributed to the increasing share of the global economy in America, Sachs said.
According to figures from the International Monetary Fund, the US only accounts for around 15 percent of the world economy, down from about 22 percent in 1980.
This has raised the question of whether the US will continue to have the requisite economic leverage to sustain the dollar's present omnipresence.
Through contrast, China's economy currently accounts for about 20 percent of the world economy, while the European Union accounts for about 16 percent.
However, by using it to impose sanctions on countries like Iran, the The US has eroded the political status of the dollar's position by blocking their exposure to the US dollar-based international financial communication network, Sachs said.
He said earlier that as China and other countries become more dissatisfied with the dominance of the dollar, which effectively gives US control over international financial markets, they may step up efforts to create an alternative payment system to deal with their international partners.
A third reason to expect the position of the yuan to increase, Sachs concluded, was that frequent crises dominated the dollar-based international financial structure, among other key issues.
