In a remarkable display of financial agility, the Chinese yuan has stepped up to showcase its strong potential. The share of the yuan in international payments has unexpectedly surged to 5.8% according to SWIFT. Indeed, the SWIFT system has long been dominated by the US dollar but it appears that the yuan has decidedly set the stage for a change in the existing order. As of September 2023, the yuan has achieved a record level of trade settlements through SWIFT, marking a significant milestone and becoming the world’s second most used currency in SWIFT. Meanwhile, the euro, the dollar's traditional runner-up, has swapped places with China's currency and now ranks third in international settlements. At the same time, the greenback retains its leading position in global trade, with an impressive share of 84.15% which is close to its average level. Now the Chinese yuan has entered the top 5 most used currencies in international payments, alongside the Japanese yen and the Saudi riyal. Notably, such countries as Russia, China, and India are working on their alternatives to SWIFT. For instance, in 2022, some Russian banks were banned from the SWIFT system and transitioned to their own System for Transfer of Financial Messages (SPFS). The world of finance can be unpredictable sometimes, and the yuan’s latest shift is proof of this ever-changing environment.
