A New Milestone in Yuan Globalisation
The yuan's cross-border settlement share — the proportion of China's total cross-border transactions settled in renminbi — reached a record 52.9% in the first half of 2026, up from 47.0% in H1 2025, according to PBOC data released in July. This is the first time the yuan has overtaken the US dollar as the most-used currency in China's own cross-border transactions.
What's Behind the Surge
- Belt and Road Initiative (BRI) trade: 12.97 trillion yuan in H1 2026, +14.8%, much of it settled in yuan
- Petroyuan agreements: expanded yuan-denominated oil and gas contracts with Russia, Saudi Arabia, and Iran
- Digital yuan (e-CNY) pilots: cross-border retail payment corridors opened with Hong Kong, Singapore, and Dubai
- SWIFT CNH expansion: yuan overtaken USD as most-used currency in trade finance letters of credit
Global Reserve Currency Status
IMF COFER data for Q1 2026 shows the yuan accounting for 3.2% of global foreign exchange reserves, up from 2.7% a year earlier. While still far behind the dollar's ~58% share, the trajectory reflects a gradual erosion of dollar dominance in bilateral trade corridors where China is a key counterparty.
Policy Implications
The PBOC has set a public target of raising the yuan's global reserve share to 5% by 2030. Reaching that level would require further capital account opening, deeper offshore yuan market development, and continued expansion of the yuan's role in commodity pricing benchmarks.