Chinese Yuan Emerges as Top Choice for Cross-Border Transactions
According to data from the State Administration of Foreign Exchange, Bloomberg Intelligence (BI) found that the Chinese yuan now accounts for 48% of China's cross-border payments and receipts, a significant increase from almost zero in 2010.
In comparison, the percentage of cross-border payments made with the US dollar has decreased from 83% to 47%.
Stephen Chiu, chief Asia foreign exchange and rates strategist at BI, suggested that the increase in yuan usage is likely a result of China’s opening up of its capital account and the rising inflows for China bonds and outflows for Hong Kong stocks.
However, it’s worth noting that these percentages are calculated based on the volume of all transactions, including trading of securities between Hong Kong’s and China’s financial markets.
Despite this development, some experts believe the Chinese yuan is still far from disrupting the dominance of the US dollar.
Economist Chris Leung notes that yuan internationalization is accelerating, but the currency’s share in global payment might remain small.
READ MORE: Chinese Yuan Emerges as Top Choice for Cross-Border Transactions
According to SWIFT, the Chinese yuan’s share of international payments was only 2.3% in March, even though the currency is weakening against the US dollar.
Former Treasury Secretary Larry Summers also dismissed the idea of the Chinese yuan posing a threat to the US dollar, citing concerns about the reliability of Chinese markets and the desire to move capital out of the country.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
