Sergio Rossi, a professor of macroeconomics and monetary economics at the University of Fribourg in Switzerland, said the LNG deal with the UAE showed that oil exporting countries are keen on using currencies such as the yuan, rather than the dollar, at the international level.
This transaction might encourage other countries to switch from the dollar to their own currencies to pay for oil and gas imports, Rossi said. This could lead to the creation of regional clearing houses through which foreign transactions in commercial or financial markets could be settled, he added.
David Phua, partner at the international law firm King & Wood Mallesons, said it is "certainly conceivable "that a basket of currencies combined with precious metals such as gold and silver could become "increasingly important means over time of settling international commodity transactions". He added this can lead to a more multipolar world in terms of international reserve holdings.
With extensive experience in negotiating and drafting long-term LNG sale and purchase agreements, Phua said it is "reasonably likely" that there will be more yuan-denominated transactions in the near future.
