Can the yuan displace the dollar from international payments? Analysis

The information in this material is not an investment recommendation.

The dollar exchange rate in the interbank market fell below 77 rubles for the first time since May 12, and the yuan exchange rate for the first time since early August fell below 11 rubles, the ruble shows growth dynamics. Against the background of the sanctions and trade wars unleashed by the United States, interest in the Chinese currency is increasing. However, it is too early to talk about ousting the dollar from international settlements. For more information about the role that American and Chinese currencies play in the global economy— see the Izvestia article.

The fall of the dollar

• On October 15, the dollar exchange rate dropped to 76.9 rubles on the interbank market for the first time since the end of May. This is attributed to the increased supply of currency amid the activity of exporters and weakening demand from importers. At the same time, the revision of expectations regarding the further dynamics of the key rate of the Central Bank of Russia has also become one of the factors supporting the ruble exchange rate.

• However, analysts agree that the time for panic has not yet come. The ruble is expected to weaken by the end of the year, including due to the negative dynamics of oil prices. At the same time, market participants who kept funds in rubles or carried out export operations temporarily gained an additional advantage due to the strengthening of the national currency and the growth of real purchasing power.

The role of the yuan

• The yuan was included in the IMF's basket of reserve currencies back in 2016. However, its importance in the global financial arena is still limited — about 2-3% of all global payments via SWIFT. The yuan lags behind the dollar, as well as the euro, the British pound and the Japanese yen. The main difficulties of the Chinese currency are related to the fact that the Chinese authorities maintain strict control over the movement of capital, and foreign investors' access to domestic financial platforms remains limited.

• Thus, as of 2025, foreigners owned only about 2-3% of the total volume of the Chinese bond market. This means that the received yuan cannot always be effectively invested. The situation in the stock market is similar: despite the gradual lifting of restrictions over the past ten years, by the end of 2024, foreign participants controlled about 5% of available assets.

Expanding the use of the yuan

• Against the background of sanctions and tariff wars, Russian-Chinese trade is showing interesting dynamics. According to data for March 2024, settlements in yuan and rubles between the two countries were almost balanced, and already in 2025, the share of transactions paid from ruble accounts exceeded half of the total turnover.

• Argentina is also a typical example. In 2023, it began conducting part of its foreign trade with China in yuan and increased the share of such settlements to about 50%. After Javier Miley came to power, the country's course shifted back to dollarization, but the fact itself shows that the yuan's position can rapidly strengthen through foreign trade mechanisms. In general, the process of expanding the sphere of influence of the Chinese currency is still quite slow.

Steps to spread the yuan

• Back in 2015, China launched its own cross-border payment system, CIPS (Cross-border Interbank Payment System), designed to expand the use of the yuan outside the country. This mechanism provides clearing and conducting international transactions in Chinese currency, as well as supports the exchange of financial messages, acting as an alternative to the Western SWIFT system. After the introduction of sanctions against Russia in 2022, the volume of use of CIPS increased significantly: by the beginning of 2023, about 26 thousand transactions worth almost $68 billion were processed daily. Despite the growth, this figure remains relatively modest compared to the American CHIPS system, where the daily turnover reaches almost $2 trillion. At the same time, about 80% of transactions passing through CIPS are still accompanied by data transfer via SWIFT.

Oil instead of dollars: why China replenishes reserves with black gold

China has supported oil prices in the world through purchases in its storage facilities

• China is also considering the possibility of legalizing the use of yuan-backed stablecoins in order to expand the international use of the national currency. For now, Beijing is formulating an approach to the use of cryptocurrencies in business in accordance with existing restrictions related to state control over capital movements.

• The real share of the yuan in global transactions lags far behind the weight of the Chinese economy in global GDP and in international trade. The Chinese currency still has significant reserves to expand its presence in international markets. Currently, the efforts of the Chinese authorities are aimed at strengthening the status of the national currency abroad. In particular, in May 2025, the People's Bank of China recommended that the country's leading banks increase the volume of transactions made in the national currency from 25% to 40%. Although this requirement does not have a mandatory status, its implementation affects the assessment of banks by the regulator.

Prospects for the yuan

• In the near future, the value of the yuan on the world stage may increase significantly. One of the most important factors is considered to be the tightening of Western sanctions pressure on Russia, which stimulates the transition to a wider use of the Chinese currency in international settlements, both now and in the long term. A number of countries may increase the use of the yuan in an effort to reduce dependence on the dollar and reduce the risks associated with possible future restrictions from Western countries.

• China has long been pursuing the goal of giving the yuan the status of the main international currency. However, strict capital controls and an annual trade surplus of up to $1 trillion per year pose significant obstacles to the implementation of this strategy. There is no talk of ousting the dollar and the euro from international settlements in the foreseeable future.

Green is off: payments for Russian oil in dollars have dropped to 5%

In general, the currencies of friendly countries and the ruble account for more than 90% of payments for raw materials and fuel.

Portfolio Selection

• The dollar still retains the status of the main reserve currency and can be considered as a tool for short-term operations and portfolio diversification. The yuan is interesting in the context of the growing influence of the Chinese economy and the expansion of settlements in national currencies, which makes it a promising asset with a stable policy of the Middle Kingdom.

• Gold, which recently broke the historical record value of $4.2 thousand, in turn, remains a universal means of preserving capital, showing resistance to inflationary risks and currency fluctuations. When choosing an investment destination, it is important to take into account the macroeconomic situation, forecasts for the rates of world central banks and the dynamics of demand for raw materials. It is these factors that shape long-term trends in financial markets.

When writing the material, Izvestia talked and took into account the opinions of:

• Vasily Koltashov, Head of the Center for Political and Economic Studies;
• Alexander Dudchak, a leading researcher at the Institute of CIS Countries, political scientist, Candidate of Economic Sciences;
• Oleg Shibanov, Professor of Finance at the New Economic School.