Harvard economist Kenneth Rogoff said the Chinese yuan could emerge as a global reserve currency within five years as countries seek alternatives to the US dollar.
He argued that China’s push for currency internationalisation comes at a time when global investors are increasingly looking to diversify away from dollar dominance.
Rogoff said Beijing must open its bond markets and build financial infrastructure independent of US-led systems to support wider adoption of the yuan.
He also highlighted the need for alternative payment rails, noting that blockchain technology could replicate existing systems at lower cost while reducing reliance on networks like SWIFT.
While cryptocurrencies are already challenging the dollar in underground economies estimated at over $20 trillion, Rogoff said their role in the legal financial system will remain limited.
He warned that governments are likely to impose stricter regulation on stablecoins, eventually aligning them with central bank digital currency frameworks.
The broader shift reflects growing efforts by China and Europe to build independent financial systems, accelerating competition over global currency dominance.