If you’ve ever wondered whether China’s push to globalize the RMB (renminbi, also known as the yuan) could shake the US dollar’s dominant position in the world, you’re not alone. As someone who’s spent years navigating cross-border payments and working with both Chinese and US clients, I’ve seen firsthand how even small policy shifts ripple through global finance. RMB internationalization isn’t just a headline—it’s already changing how trade deals are struck, how reserves are held, and how companies manage risk. This article goes beyond the usual talking points, diving into real-life examples, regulatory references, and an honest look at what works (and sometimes what doesn’t). Plus, I’ll compare how “verified trade” standards differ across major economies, and share a story or two from the trenches.
Let’s be real: for decades, the US dollar has been the king of international finance. Whether you’re settling a shipment of soybeans or issuing a billion-dollar bond, chances are the transaction runs through USD. That’s given the US enormous leverage, from setting global interest rates to enforcing sanctions.
Now, China—the world’s second-largest economy—is making a concerted effort to boost the RMB’s global usage. They’re doing this through trade agreements, the Belt and Road Initiative, and by opening up their financial markets. For instance, according to SWIFT data, the RMB was the world’s fifth most used currency for global payments as of 2023 (SWIFT RMB Tracker).
But what does all this mean for the dollar? Is the greenback’s reign really under threat, or is this just another blip? To answer that, let’s walk through what’s actually happening on the ground.
A while back, I was helping a European importer settle payments with a supplier in Shenzhen. Pre-2015, everything was in USD. Then, China launched the China International Payment System (CIPS), making it way easier to clear RMB transactions directly. So, we decided to try paying in RMB.
Here’s what happened (and where it got messy):
But does this mean the USD is doomed? Not quite. The dollar’s network effect (everyone uses it, so everyone wants it) is still massive. But the cracks are starting to show, especially for trade with China or countries closely tied to its economy.
One thing that often gets overlooked is how trade is actually verified and settled across borders. Here’s a quick table I put together based on my own compliance headaches and digging through regulations. Verified trade standards don’t just affect paperwork—they determine which currency is favored and how easily transactions can shift away from the USD.
| Country/Region | Standard Name | Legal Basis | Enforcement Agency | Notes |
|---|---|---|---|---|
| USA | Verified Exporter Program | 19 CFR §149.3 | U.S. Customs and Border Protection (CBP) | Rigorous background checks; USD preferred for customs payments |
| China | Accredited Exporter System | General Administration of Customs Order No. 249 | GACC (China Customs) | Push for RMB settlement in customs; digital platforms integrated |
| EU | Authorized Economic Operator (AEO) | EU Regulation 952/2013 | European Commission, National Customs | Euro-centric but multi-currency accepted; focus on supply chain security |
Source: CBP; GACC; EU AEO Program
Let’s look at a real scenario: In 2022, Russia began settling a significant portion of its China-bound oil and gas exports in RMB, sidestepping the USD due to Western sanctions (Reuters). A Russian oil firm and a Chinese refinery agreed to invoice and settle in RMB. At first, there were technical hiccups—Russian banks weren’t fully plugged into China’s CIPS system, and there were delays in cross-border verification (Russian clearing banks had to jump through new hoops).
But within months, both sides ironed out the kinks. The Russian side opened RMB accounts at Chinese banks, and transactions sped up. For Russia, this meant less USD exposure and less risk of being frozen out by US sanctions. For China, it reinforced the RMB’s status as a trade currency.
However, an industry expert I spoke with at a conference in Shanghai (let’s call her Ms. Li, a senior compliance officer at a major Chinese bank) put it bluntly: “The infrastructure is there, but trust takes longer to build. Even with all the tech, most of our corporate clients still keep some USD reserves, just in case.”
The IMF’s 2023 report on reserve currencies notes that the RMB’s global reserve share is still under 3%, compared to 58% for the dollar (IMF COFER). Meanwhile, the US Treasury has repeatedly said that “the dollar’s role reflects the United States’ economic, financial, and institutional strengths”—but also acknowledged growing competition (US Treasury).
On the other hand, the People’s Bank of China’s official 2023 report states: “Expanding the use of RMB in cross-border trade and investment is a strategic priority to improve China’s economic resilience.” (PBOC)
My takeaway, after talking with bankers and exporters, is that while the RMB is making inroads, there’s no overnight “flip” where the dollar is dethroned. Instead, we’re seeing a patchwork shift—certain sectors and regions (energy trade, Belt and Road countries) are moving to RMB, while others stick to USD for its deep liquidity and legal protections.
So, what’s the bottom line? From my own trial-and-error (and a few failed payment attempts), it’s clear that RMB internationalization is chipping away at the dollar’s absolute dominance, especially in Asia and commodity markets. But the USD’s global “network effect,” legal infrastructure, and entrenched habits mean it’s not going anywhere fast.
If you’re a business considering whether to settle in RMB or USD, I’d suggest a pragmatic approach: test small transactions first, keep an eye on regulatory changes, and always have a backup in case a new payment rail doesn’t work as planned. For policymakers, the lesson is that trust and legal clarity matter as much as technology.
Looking ahead, I’ll be watching how digital currencies (like China’s e-CNY) enter this mix, and whether more countries opt for RMB-based trade to hedge geopolitical risk. In the meantime, if you ever get stuck dealing with a cross-currency mess, don’t beat yourself up—sometimes the “old way” still works best, at least for now.
For more, check out the latest from the Bank for International Settlements on currency usage trends, or dive into the WTO’s World Trade Report 2023 for a more macro take.