On the first trading day after the May Day holiday, the exchange rate of the US dollar against the RMB in the foreign exchange market fell directly below the 6.80 mark.
Behind this strengthening of the exchange rate are short-term factors such as the phased decline of the US dollar index, as well as the medium- and long-term logic that the RMB has been included in diversified currency allocation options by more and more overseas institutions.
The conflict in the Middle East is still simmering, and global funds are looking for safe havens. There are various signs that the internationalization of the RMB has quietly passed a key threshold.
The first to feel this change is the cross-border clearing system.
In early April, the single-day transaction volume of the RMB Cross-border Payment System (CIPS) exceeded one trillion yuan, reaching 1.22 trillion yuan, with nearly 42,000 transactions, setting a record high.
Data from the Cross-Border Interbank Payment and Clearing Co., Ltd. show that the average daily transaction size of CIPS in March was approximately 920.5 billion yuan, an increase of nearly 48% from 619.7 billion yuan in February, a record high in the past year; the number of transactions reached 35,740, a significant increase from 25,930 in February.
Since the United States and Israel launched a military attack on Iran on February 28, the hedging function of traditional safe-haven assets represented by U.S. bonds has failed, and global investors have turned their attention to China.
In the past month, China’s government bond yields have remained stable, the RMB has appreciated against the trend, and RMB assets have become a new safe haven amid the Middle East crisis.
Wang Yong, a professor at the Zhengzhou Training Institute of the People’s Bank of China, believes that the conflict between the United States and Iran has weakened the safe-haven nature of U.S. dollar assets, and some cross-border funds have turned to RMB settlement. At the same time, the RMB settlement volume of major oil-producing countries’ crude oil trade with China has increased, directly boosting CIPS transaction volume.
As of the end of March, there were 194 direct participants and 1,597 indirect participants in CIPS.
Participants are located in 126 countries and regions around the world, and its business can cover 191 countries and regions around the world through more than 5,100 corporate banking institutions.
Wu Yasi, managing director of Standard Chartered Bank, said that more and more global companies have widely used RMB in cross-border trade, procurement and supply chains.
The proportion of RMB used in cross-border trade has increased from 16% in 2020 to nearly 30% in 2025.
The revised “RMB Cross-border Payment System Business Rules” were officially implemented on February 1, further improving the convenience of CIPS.
If CIPS solves the problem of “whether the pipeline is open or not”, then what the offshore RMB market needs to solve is “whether the water flow is large or not.”
Since the beginning of this year, there have been intensive actions at the institutional level.
At the end of February, the central bank issued the “Notice on Matters Concerning the RMB Cross-border Interbank Financing Business of Banking Financial Institutions” to support domestic banking financial institutions and overseas institutions in standardizing the RMB cross-border interbank financing business, develop the RMB offshore market, and uniformly manage the RMB cross-border interbank financing business of the domestic banking system and overseas institutions.
Tian Lihui, a professor of finance at Nankai University, believes that the current cost of RMB funds is relatively low, and the “Notice” clearly supports banks in providing liquidity to the offshore market, which will help stimulate overseas RMB financing demand.
According to data from the central bank, the amount of cross-border RMB receipts and payments in 2025 will reach 70.6 trillion yuan.
The RMB has become my country’s largest settlement currency for external payments and the world’s second largest trade financing currency.
In the first quarter of 2026, the amount of cross-border RMB settlement under the current account reached 4.52 trillion yuan, a year-on-year increase of approximately 14.1%; the amount of cross-border RMB settlement of direct investment was 2.11 trillion yuan; the total cross-border RMB settlement amount was 6.63 trillion yuan, an overall year-on-year increase of approximately 9.6%.
China’s monetary policy implementation report for the first quarter of 2026 proposed that in the next stage, more qualified overseas entities will be welcomed to issue panda bonds, promote the internationalization of the RMB, improve the level of capital account opening, carry out high-level opening pilots for cross-border trade and investment, optimize cross-border fund management of direct investment and overseas loans, further expand the use of RMB in cross-border trade and investment, deepen foreign currency cooperation, and develop the RMB offshore market.
On March 16, the country’s first digital RMB customs tax deposit business was launched in Qingdao, Shandong.
Overseas, Bank of China has recently launched two iconic RMB businesses in the UK.
From a more macro perspective, according to data released by the International Monetary Fund in March, in the fourth quarter of 2025, the U.S. dollar’s share of global official foreign exchange reserves dropped to 56.77%.
During the same period, the RMB’s share of the world’s allocated foreign exchange reserves was approximately 2.2%, ranking behind the US dollar, euro, Japanese yen and pound, making it the fifth largest reserve currency in the world.
Since the IMF first released data on RMB reserves in 2016 (accounting for 1.08%), the share of RMB has increased by more than 270%.
At present, more than 80 overseas central banks or monetary authorities have included RMB in their foreign exchange reserves.
In terms of oil settlement, China and Saudi Arabia have signed a local currency swap agreement in November 2023, and Saudi officials have made it clear that they are “open” to RMB settlement.
Russia’s energy trade with China has shifted to RMB settlement on a large scale. The proportion of Iranian crude oil exports denominated in RMB continues to increase. The iron ore trade between Brazil and China has also begun to test the waters of RMB settlement.
In 2025, China’s goods trade surplus will be US$1.0606 billion, a year-on-year increase of approximately 19.8% compared to 2024, exceeding US$1 trillion for the first time in history.
my country’s foreign exchange reserves reached US$3.34 trillion in March this year.
Horst Lecher, a professor at the Frankfurt School of Finance and Management in Germany, believes that the acceleration of RMB internationalization is mainly driven by the trade function. The growth of China’s trade with countries in the global South makes direct RMB settlement a rational choice to reduce exchange costs and avoid exchange rate risks.
However, in December 2025, the share of US dollars in SWIFT international payments rose to 50.49%, a new high since 2023; the share of RMB dropped to 2.73%.
This ranking is still far behind the size of the Chinese economy in the world.
The People’s Bank of China emphasized that it will continue to build and develop a multi-channel, wide-coverage, safe and efficient RMB cross-border payment system, increase international cooperation in cross-border payments, and actively participate in international financial governance and cooperation. The key word is “orderly”.
At the exchange rate level, stability is also important. The RMB will show a strong appreciation trend after the year, which is very conducive to the internationalization of the RMB.
The true meaning of RMB internationalization is not to replace anyone, but to provide the global financial system with a currency with transparent rules, stability and credibility, and the ability to shoulder responsibilities in a multi-polar world.
