In Depth: China Makes Further Inroads in Popularizing the Yuan

The yuan made deeper inroads as a global currency in the first quarter this year, as countries including Russia and Brazil have joined China’s drive to boost the currency’s use in cross-border settlements amid headwinds including a global dollar shortage and the prolonged war in Ukraine.

Meanwhile, China has been ramping up efforts to build up the financial infrastructure designed to cater to cross-border yuan settlements, such as setting up yuan clearing banks in offshore markets. It is also expanding its homegrown system that allows global banks to clear and settle cross-border yuan transactions onshore — the Cross-Border Interbank Payment System (CIPS). The number of direct participants in the CIPS grew to 79 in March. Meanwhile, China has signed or scaled up the size of currency swap pacts with many countries.