China is leaving no stone unturned to internationalize the Chinese Yuan by challenging the US dollar’s prestige. The Chinese administration is currently conducting trials to inject digital Yuan into cross-border transactions with Saudi Arabia, introducing another dimension of the multipolar financial concept to the world.
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Chinese Yuan’s Global Usage Surged To 21%
Using Chinese currency in cross-border transactions has gained significant momentum this year. According to the People’s Bank of China, total cross-border Yuan payments have risen by 21.1% year-on-year between January and August to hit the 41.6 Trillion Yuan mark, taking the world by surprise.
In addition, the report from the Society for Worldwide Interbank Financial Telecommunication (Swift), the world’s largest interbank messaging service, stated that Yuan’s share of global transactions accounted for 4.69% in August.
It is to be noted that the US dollar has steadily maintained its presence in standard global invoicing. With the current de-dollarization narratives, the trend is shifting, and global economies are welcoming new currencies, including the Chinese Yuan, to explore and foster growth and development.
Per SCMP, the internationalization of the Yuan holds a bigger perspective in mind. The steady bolstering of the Yuan globally is labeled as China’s way to promote its political influence worldwide.
“For the next step, the People’s Bank of China will further enhance the fundamental systemic arrangement of the yuan’s cross-border use.” The central bank said in the September 30 report.”
In addition, China has already begun testing its Yuan-centric CBDC transactions with Saudi Arabia. The trial method will also be used with other regions, including Hong Kong, Thailand, and the UAE.
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China’s De-Dollarization Drive
China is an active member of the BRICS pact, an alliance of nations actively promoting the idea of de-dollarization. The nation has long been vying for central authority and control by promoting the use of the yuan globally.
China has also conducted major transactions with Russia in Yuan, helping in its internationalization and expansion. The news of digital yuan trials is also sparking rumors of a possible Petroyuan narrative. If this development becomes a reality, it can deliver a severe blow to the US dollar’s integrity.
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