Cross-border Payments in 2024: Might the Yuan Challenge the Dollar's Dominance?
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In the world of global finance, a significant shift is underway - the gradual move away from the US dollar (USD) in cross-border payments. This complex topic, known as dedollarisation, is gaining attention as countries seek alternatives to the USD for their global currency needs.
Analysis of currencies in Chinese trade is ongoing, with the yuan, China's currency, emerging as a potential replacement for the USD. Recent datasets are being analysed to determine if this trend is occurring, and the prospects for dedollarisation in 2024 are under consideration.
As of 2024 and into 2025, dedollarisation in cross-border payments has been progressing but remains limited in scale. The USD continues to dominate global payments, accounting for around 48% of SWIFT-reported transactions in 2025, while the euro and dollar combined still make up more than 70% of payments worldwide.
The yuan, however, is gaining prominence. It ranks sixth in global payment usage by value with about a 2.9% share in mid-2024, peaking briefly to 4.7% in July 2024. Despite this, the dollar's dominance remains strong, holding nearly half of global payments volume and a major share of forex reserves, albeit with some decline against the euro and yen in 2023.
Efforts to reduce reliance on the USD are underway, especially among the BRICS countries (Brazil, Russia, India, China, South Africa) and related emerging economies. These nations are experimenting with multilateral payment systems and considering a unified currency to facilitate regional trade without the USD. Initiatives include the BRICS Cross-Border Payment Initiative (BCBPI) and alternative messaging systems to SWIFT.
The yuan's internationalisation is growing but still constrained by China’s capital controls and lack of full convertibility. China settles about half of its foreign trade and investment transactions in yuan, showing gradual progress. Digital currency initiatives like Project mBridge and multi-currency digital platforms (involving China, Hong Kong, Thailand, UAE) are testing solutions for real-time interbank currency swaps, which could further diminish dollar dependence over time.
Some bilateral trade and debt repayments, such as by India and Argentina with China, are increasingly conducted in yuan, indicating regional and bilateral use cases expanding beyond China’s borders.
In summary, while dedollarisation is an active trend driven by geopolitical and economic factors, it is a gradual process, and the dollar remains the overwhelmingly dominant global currency in cross-border payments as of 2024 and early 2025. The yuan is becoming a meaningful but still distant competitor.
This article offers insights on cross-border payments globally, providing access to extensive research and analysis. It is written by Lucy Ingham and Callum Tyndall and is available on LinkedIn. For those interested in staying updated on this topic, the article includes an industry-leading newsletter.
[1] Ingham, L. & Tyndall, C. (2024). Dedollarisation: The growing challenge to the US dollar's dominance in cross-border payments. Industry-leading newsletter. [2] Ingham, L. & Tyndall, C. (2024). BRICS Cross-Border Payment Initiative: A step towards reducing reliance on the US dollar. Industry-leading newsletter. [3] Ingham, L. & Tyndall, C. (2024). The yuan's internationalisation: Progress and challenges. Industry-leading newsletter. [4] World Bank. (2025). Global Economic Prospects: Dedollarisation and the rise of the yuan. Report.
- Businesses and countries involved in global commerce are closely monitoring the progress of dedollarisation, as the gradual move away from the US dollar in cross-border payments has significant implications for global finance.
- The BRICS countries, along with related emerging economies, are actively seeking alternatives to the US dollar, participating in initiatives such as the BRICS Cross-Border Payment Initiative, and exploring the possibility of a unified currency to facilitate regional trade without relying on the USD.
