China’s currency, the yuan, has surpassed the US dollar as the most widely-used currency for cross-border transactions in China for the first time in history. According to official data from the State Administration of Foreign Exchange, cross-border payments and receipts in yuan rose to a record $549.9 billion in March, up from $434.5 billion in February. The yuan was used in 48.4% of all cross-border transactions, while the dollar’s share declined to 46.7% from 48.6% the previous month.
This achievement reflects Beijing’s efforts to increase the international use of the yuan, which has long been promoted as a way to settle cross-border trades. The Chinese government has taken several steps to make the yuan more attractive, including easing restrictions on its use and increasing its convertibility.
However, the yuan’s use in global trade finance remains low, with the dollar still accounting for the vast majority of such transactions. According to data from SWIFT, the yuan’s share of global currency transactions for trade finance rose to 4.5% in March, up from 2.8% in February, while the dollar accounted for 83.71% of such transactions.
Despite this, experts believe that the yuan’s internationalization will continue to grow, as China’s economy becomes increasingly important on the global stage. As the world’s second-largest economy, China is already a major player in global trade and investment, and the increasing use of the yuan is seen as a natural progression of this trend.
While the yuan’s rise as a global currency is a positive development for China, it also raises concerns about the country’s influence on the global financial system. Some experts worry that China’s growing economic power could be used to advance its own interests at the expense of other countries.
In any case, the yuan’s recent milestone marks a significant achievement for China, and highlights the country’s continued efforts to increase its influence on the world stage.
