Overview
- Beijing has expanded a parallel yuan-based payment system centered on the Cross‑Border Interbank Payment System (CIPS) and smaller Chinese banks that can settle large cross-border trade without routing through U.S. dollar clearing.
- Trade flows with Russia have moved sharply away from dollars, with over 90% of bilateral transactions settled in yuan or rubles and total bilateral trade reaching about $245 billion in 2024.
- China now takes roughly 80–90% of Iran’s oil exports and routes most payments in yuan through closed-loop arrangements that match oil sales to China with Chinese goods exports back to Iran.
- Some Russian oil firms began using Bitcoin, Ether and USDT as a narrow bridge to convert yuan or rupee receipts into rubles, but crypto-mediated transfers remain a small share of overall trade.
- U.S. authorities have broadened sanctions to target Iranian exchange houses and Chinese-linked facilitators, yet those measures so far have not reversed the shift to yuan/ruble settlement and may push further adaptations that raise compliance costs.