China’s digital Yuan to bypass 38% of global transactions dominated by US system

[oil&gas]

Apr 7th, 2025

Bypassing the US-dominated infrastructure for global trade, the People’s Bank of China reportedly announced connecting 10 ASEAN and Middle Eastern nations, mitigating the need for the US-based SWIFT system for international trade in these regions.

The Digital Yuan, called Digital RMB, connected 10 ASEAN (Association of Southeast Asian Nations) consisting of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, and six Middle Eastern nations, including the UAE.

This undercuts SWIFT (Society for Worldwide Interbank Financial Telecommunications), the US-based system for international trade transactions.

As per reports, the blockchain-run transaction system of China warps international settlements down to seven seconds and takes 3-5 business days with SWIFT.

Moreover, Digital RMB will cut down transaction fees for these channels by 98%, as per reports.

This can shift the power for international trade from the US to China, as expanding networks with ASEAN and Middle Eastern nations will bypass 38% of existing SWIFT traffic.

Before this, the BRICS nations including Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates, have pondered upon the idea of having a currency of their own, to lower the dependency on the US dollar.

This comes after what experts term an ‘all-out trade war’ between China and the US after US President Donald Trump imposed a 54% reciprocal tariff on China. The South Asian giant, in turn, imposed an additional tax 34% tariff on US imports.

In response to a related query, Chinese Foreign Ministry spokesperson Lin Jian said at a daily news briefing that the United States, under the guise of ‘reciprocity’, acted in a manner that prioritizes its own interests at the expense of other nations’ legitimate benefits. This approach places “America First” above international rules, exemplifying ‘unilateralism, protectionism, and economic bullying’.

Lin added that the Chinese government has issued its position on opposing US abuse of tariffs, making clear its solemn attitude.

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Brazil, China ditch US dollar for trade payments, favour yuan

Brazil and China have agreed to bypass the US dollar when paying for trade goods - here’s why it’s a massive deal.

Jamie Seidel
March 31, 2023


Brazil has just cut a deal with China to ditch the US dollar when paying each other for trade goods. It’s the latest victory in Beijing’s long-term drive to stomp on the greenback and establish the yuan as the dominant international currency.

The deal, announced Thursday, has revived concerns about the US dollar’s future.

Brazil and China will directly exchange payments without first converting their currencies to a trusted third-party economy.

That’s the traditional role of the greenback.

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It became the backbone of the global economy after World War II. The enormous economy, robust democracy and transparent regulatory systems of the United States quickly entrenched its reputation as a safe haven for international investors.

But times have changed.

The US no longer looks as socially or economically stable as it did just a decade ago. Now an increasing number of nations are eager to find alternative financial systems to insulate themselves from Washington’s willingness to use sanctions as political leverage.

The Brazilian Trade and Investment Promotion Agency describes the new deal as promoting “even greater bilateral trade and facilitating investment” with China. But ongoing rises in the value of the US dollar and the fallout from the US Reserve Bank’s interest rate moves means it’s also being touted as a cost-cutting initiative.

Beijing, however, sees such moves as a way to insulate itself from international pressure.

“We would impose severe sanctions on anyone” who would arm Russia, US President Joe Biden pronounced when asked about the possibility of China rearming Russia after its disastrous attempt to invade Ukraine. “We would respond.”

The message struck home.

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“Western countries led by the US have implemented comprehensive containment, encirclement and suppression against us, bringing unprecedented severe challenges to our country’s development,” Chairman Xi Jinping retorted.

Foreign Minister Qin Gang went on to declare: “The US claims it wants to ‘compete to win’ with China, and does not seek conflict. But in fact, the so-called ‘competition’ by the US is all-round containment and suppression, a zero-sum game of life and death.”

The almighty dollar

World governments hold US dollar reserves to speed up global transactions and enable reserve banks to intervene in foreign exchange markets to prop up their own currencies.

Businesses, tourists and private investors also find the US dollar’s availability, ease and reliability attractive when conducting their own transactions.

But sanctions following the invasion of Ukraine brought all such activities for Russia’s institutions and 10,000 of its oligarchs to a screaming halt.

And some 44 countries — including Australia, Canada, Japan, New Zealand, South Korea, and nearly all of Europe — backed the US move to punish President Vladimir Putin.

“Chinese authorities were shocked by the seizure of the Russian central bank’s foreign exchange reserves following the invasion of Ukraine. In the event of a Sino-American conflict, Chinese assets would similarly be vulnerable,” argues Australian Strategic Policy Insitute (ASPI) senior fellow David Uren.
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https://www.news.com.au/finance/markets/world-markets/brazil-china-ditch-us-dollar-for-trade-payments-favour-yuan/news-story/682a517c37ba14f306e65ad0e83f6307