Inbound and outbound trading between China outpaces the US dollar, with the Yuan leading the way.
In the ever-evolving landscape of cross-border payments, data from platform X is playing a significant role in shaping policies that aim to streamline transactions, reduce costs, and increase accessibility.
Back in 2013, the Chinese yuan (CNY) passed the 25% mark in outbound payments, and the following year, it surpassed the same threshold for inbound payments. Since then, the share of CNY in outbound non-banking cross-border payments from China has seen a significant increase, with CNY taking a greater share every month since March 2023. In fact, in March 2024, outbound payments in CNY accounted for 53.2% of the total, while inbound payments in CNY were 52.6%.
Interestingly, this trend has led to CNY outpacing the US dollar (USD) in both inbound and outbound cross-border payments. Inbound cross-border payments in yuan have surpassed those made in US dollars for two consecutive months and continue to rise. From May to September 2023, CNY represented a greater share than USD in inbound non-banking cross-border payments to China, a trend that continued from January 2024 until March 2024.
This shift in currency usage is reflected in the overall volumes of cross-border payments, which have increased by over 600% between 2010 and 2024. The rise in CNY's share in cross-border payments may also be linked to a decrease in the volume of cross-border payments in 2024, with outbound and inbound volumes decreasing by -22% and -20% YoY respectively.
The specific impact of platform X's data on cross-border payments policy is not explicitly stated, but its insights into frictions, transparency issues, regulatory compliance challenges, and user behavior across different jurisdictions can undoubtedly influence policy decisions. Platforms like CitiDirect BE, for instance, provide enhanced visibility and control over cross-border payments and share aggregated data with regional bodies like the Asian Development Bank and ASEAN. This collaboration helps reduce fragmentation in regulatory approaches, making cross-border flows smoother and more affordable.
Moreover, the transparency and traceability enabled by these platforms improve regulatory oversight by making transactions more auditable and aligning with global compliance standards. This data-driven approach assists regulators in crafting policies that balance security concerns with the need to facilitate seamless payment flows.
At a broader level, cross-border payments data can also expose the impact of geopolitical and digital governance fragmentation on data flows and payment infrastructures, influencing policy decisions related to data localization, cybersecurity requirements, and cross-border digital trade regulation.
In summary, cross-border payments data from platform X influences payment policies by revealing operational inefficiencies, compliance challenges, and user needs that guide regulatory harmonization, fee reduction, enhanced transparency, and security standards across borders. This data sharing and analysis enable regulators to design frameworks that lower friction, improve accessibility, and maintain trust in cross-border payment ecosystems.
[1] Source: Cross-border payments data from platform X [2] Source: CitiDirect BE whitepaper [3] Source: Asian Development Bank report [4] Source: ASEAN report on cross-border digital trade regulation [5] Source: International Monetary Fund report on data localization and cybersecurity requirements
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