Key Points
- Global daily trading of the Chinese yuan has surged to $817 billion.
- The yuan is now the fifth most-traded currency, getting very close to the British pound. Its share of global currency transactions has risen to 8.5%.
- The growth is part of China’s long-term effort to promote the yuan internationally.
- The Swiss franc also experienced a significant increase, becoming the sixth most-traded currency in the world.
Global trading of the Chinese yuan has surged to $817 billion a day, putting it in hot pursuit of the British pound as the world’s fourth most-traded currency. A new survey from the Bank for International Settlements (BIS) shows that the yuan’s share of global currency transactions has jumped to 8.5%, up from 7.0% in 2022.
This impressive growth extends a decade-long trend and reflects Beijing’s ongoing efforts to enhance the yuan’s global appeal and erode the dominance of the U.S. dollar. While the yuan remains in fifth place for now, it is rapidly closing the gap with the British pound, whose share of the market has fallen from 12.9% to 10.2%.
“The yuan is rapidly closing in on the pound, as China’s push to internationalise its currency shows progress,” said one foreign exchange strategist.
However, the path to unseating the dollar is still a long one. China’s strict controls on cross-border capital flows remain a major hurdle. Other measures of the yuan’s international use also paint a more mixed picture. For example, its share of global payments on the SWIFT network has actually declined over the past year.
The BIS survey also revealed another big winner: the Swiss franc. Daily trading in the currency surged to $612 billion, enabling it to leapfrog both the Australian and Canadian dollars and become the sixth most-traded currency in the world.
