POLICY COMPASS

Will the Petrodollar System be Replaced by China-led CBDCs?

By Brunello Rosa

24 June 2024

In this paper we discuss:

  • The “expiry” of the petro-dollar agreement that was supposedly signed between US and Saudi Arabia in 1974;
  • The agreements that were actually signed in June 1974 and at the end of the year, and what they actually entail;
  • The practice being far more relevant than the theory, that the US represents the only large and liquid enough market where to recycle the revenues from oil sale;
  • The fact that Saudi Arabia has decided, in June, to join the China-led mBridge CBDC project; and
  • Why this could represent a watershed moment for the USD’s unchallenged supremacy as the global reserve currency.

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