Yuan Becomes No. 2 Trade Finance Currency, Eyes Euro's Global Exchange Spot as De-Dollarisation Deepens
Updated
Updated · South China Morning Post · Jun 11
Yuan Becomes No. 2 Trade Finance Currency, Eyes Euro's Global Exchange Spot as De-Dollarisation Deepens
2 articles · Updated · South China Morning Post · Jun 11
Summary
China's yuan has already become the world's second-largest trade finance currency and is now closing in on the euro's No. 2 position in global settlements, according to Chinese analysts and officials.
A record single-day transaction volume in China's yuan-denominated cross-border payment system in early April underscored rising cross-border use after renewed geopolitical tension and persistent de-dollarisation trends.
Pan Gongsheng said in June 2025 that the yuan ranked as the world's third-largest payment currency on a comprehensive basis, suggesting the gap with the euro has narrowed.
The dollar still holds a commanding majority in international settlements, but a weaker European backdrop could make the yuan's climb to second place more achievable in the near term.
Why is the yuan gaining on the euro, despite Europe's more open financial markets?
As the yuan grows in trade, will dollar-based stablecoins secure America's digital finance supremacy?
Is China building a parallel payment system for allies or a true global rival to SWIFT?
Yuan Surpasses Euro as World’s No. 2 Trade Finance Currency: Drivers, Challenges, and the Path to a Multipolar Financial System
Overview
By early 2026, the Chinese yuan surpassed the euro to become the second-largest currency in global trade finance, marking a major shift in the international financial landscape. This rise is driven by strategic infrastructure development, especially the rapid expansion of China’s Cross-Border Interbank Payment System (CIPS), which processed about 180.2 trillion yuan in transactions by the end of 2025. The surge in CIPS activity reflects a broader trend toward currency diversification, as more countries and institutions seek alternatives to traditional currencies. Together, these factors highlight the yuan’s growing influence in global trade.