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Yuan
EconomyGlobal Economy

As de-dollarisation trends persist, can the yuan take the euro’s place?

The US dollar is still dominant, but a slump in Europe may see China’s currency gain strength and reach the No 2 spot in global settlements

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Illustration: Brian Wang
Ji Siqiin Beijing

In early April, hours after US President Donald Trump threatened to bomb Iran “back to the Stone Ages” in a prime-time address, China’s yuan-denominated cross-border payment system set a record for transaction volume in a single day.

The Cross-Border Interbank Payment System (CIPS) skyrocketed to 1.22 trillion yuan (US$180.3 billion) on April 2, almost doubling the daily average volume in February.
The spike occurred as more oil-producing nations rapidly scaled up their share of yuan settlements – the so-called petroyuan – amid a global trend towards de-dollarisation that the Iran war has further accelerated.
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But even with these changes, the US dollar continues to maintain a sizeable majority in international settlements. However, one milestone appears more attainable in the short term: increasing the yuan’s cross-border usage to a large enough degree for the currency to surpass the euro and take the second-place spot in global exchanges.

Analysts and industry insiders in China said the moment was fast approaching, if it had not already arrived. Central bank governor Pan Gongsheng said in June 2025 the yuan was the third-largest payment currency globally on a comprehensive basis, and had already become the world’s second-largest trade finance currency.

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“The signs are definitely there,” said Liu Xiaochun, vice-president of the China Academy of Financial Research at Shanghai Jiao Tong University. “Honestly, if Europe keeps stagnating the way it is now, [the euro] is going to be overtaken pretty quickly.”
Others said the essence of the yuan’s rise is not necessarily about taking over the euro, but the evolution of global trade into a system where multiple currencies coexist for settlement depending on region, political alignment and sector.
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