The renminbi is weaving a monetary zone across Asia

The story is tempting: Asia is “de-dollarising” and switching to the yuan. The data tell a subtler story. The renminbi is not replacing the dollar. It is gradually becoming the operating currency of an economic space centred on China: first for payments, increasingly for funding, and much less for savings. That is less spectacular than a change in the world’s dominant currency. It is also much more tangible.

This investigation extends our audit of the de-dollarisation narrative against the numbers by focusing on the renminbi’s regional uses.

First: renminbi or yuan?

The renminbi (RMB) is the name of China’s currency. The yuan is its unit of account. In foreign-exchange markets, CNY usually refers to onshore renminbi and CNH to offshore renminbi.

This distinction matters because a currency can gain ground in trade settlement, credit, foreign-exchange markets or central-bank reserves without advancing at the same speed in each function.

That is exactly what is happening to the renminbi.

Central Asia: a small base, a spectacular acceleration

According to the People’s Bank of China’s RMB Internationalization Report 2025, cross-border RMB settlement between China and the five Central Asian states, Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan, reached RMB 79.06 billion in 2024, up 53.9% year on year.

Nearly 70% of those flows were linked to trade in goods. In China’s bilateral goods trade with Kazakhstan, Kyrgyzstan and Tajikistan, the RMB settlement ratio was roughly 25% in 2024 and rose to around 30% in the first half of 2025. From 2020 to 2024, the PBOC calculates an average annual growth rate of 59.1% in cross-border RMB use in the region.

Source: PBOC, RMB Internationalization Report 2025, pp. 97-98.

The growth rate is spectacular. The level is not: RMB 79 billion is less than 1% of the RMB 8.9 trillion of China-ASEAN settlement recorded in the same year.

Central Asia is therefore a high-growth laboratory, not yet the centre of gravity of the renminbi in Asia.

That distinction is crucial.

Kazakhstan: the yuan also rises when Russian channels close

Kazakhstan offers perhaps the best case study for avoiding a common mistake: treating rising yuan demand as proof of a spontaneous monetary preference.

In its Financial Stability Report 2024, the National Bank of Kazakhstan notes that the dollar remains dominant in the country’s FX market. On the organised market, CNY/KZT is still small: its share peaked at just 2% during its most active months of 2024.

Off-exchange, however, the move was abrupt. CNY/KZT transactions reached KZT 410 billion in 2024, more than 50 times the previous year’s volume.

And the Kazakh central bank gives its own explanation: sanctions imposed on Gazprombank triggered additional demand for the yuan in both exchange and off-exchange markets.

Source: National Bank of Kazakhstan, Financial Stability Report of Kazakhstan 2024, section 1.2.5.

Part of the region’s “yuanisation” is therefore not a silent referendum against the dollar. It is a consequence of fragmented payment channels: when a rouble route becomes harder to use, firms seek another currency capable of settling trade with China.

The outcome is still important. The cause changes the interpretation.

A currency becomes truly useful when the plumbing exists

Occasionally paying a Chinese supplier in yuan is one thing. Building a banking system in which yuan can circulate with limited friction is another.

That is where the shift becomes structural.

In June 2025, Eldik Bank in Kyrgyzstan obtained direct-participant status in CIPS, China’s cross-border interbank RMB payment, clearing and settlement system. In September 2025, the bank said it had become the first institution in Central Asia to launch CIPS as a direct participant.

Then, on 19 August 2026, Eldik Bank moved a step further: it began offering Kyrgyz banks and foreign financial institutions the ability to join CIPS as indirect participants through its own infrastructure.

Sources: Eldik Bank, 18 June 2025; 10 September 2025; 19 August 2026.

A few weeks earlier, Kazakhstan strengthened another layer of that architecture. The National Bank of Kazakhstan and the PBOC signed a new bilateral currency-swap agreement in late July 2026, valid for three years and renewable by mutual consent. The arrangement gives both central banks a mechanism for accessing liquidity in their national currencies.

Source: National Bank of Kazakhstan, 4 August 2026.

The combination matters:

RMB trade → banks capable of settling it → CIPS access → central-bank liquidity arrangements.

This is no longer just about choosing a currency on an invoice. It is about building the plumbing that allows the currency to function.

CIPS is scaling rapidly, but CIPS is not SWIFT

At the end of June 2026, CIPS had 210 direct participants and 1,619 indirect participants. Of the indirect participants, 1,157 were in Asia, including 542 in mainland China.

From January through July 2026, CIPS processed 5.232 million transactions worth a cumulative RMB 120.3 trillion. July alone accounted for RMB 19.4 trillion.

Source: CIPS, operating statistics, July 2026.
Source: CIPS, worldwide participants, June 2026.

Those numbers are sometimes used in misleading comparisons with SWIFT.

CIPS and SWIFT do not measure the same thing. CIPS is an RMB payment, clearing and settlement infrastructure. SWIFT primarily provides a multi-currency financial-messaging infrastructure. CIPS transaction value cannot therefore be converted into a “market share versus SWIFT”.

The best counterweight comes from SWIFT itself.

Its August 2026 Global Currency Tracker, covering July payments, puts the renminbi at 3.10% of the value of global payments observed on the network, in fifth place. The dollar accounts for 50.99%.

Excluding payments within the euro area, the renminbi falls to 2.34%, versus 59.58% for the dollar.

Source: SWIFT, Global Currency Tracker, August 2026.

So yes: the RMB network is becoming denser very quickly. No: it is not replacing the dollar network globally.

ASEAN is the real centre of gravity

If Central Asia offers the clearest signal of geopolitical acceleration, ASEAN provides the scale.

In 2024, cross-border RMB settlement between China and ASEAN reached RMB 8.9 trillion, up 50.7% year on year. Settlement linked to trade in goods accounted for RMB 2.4 trillion, up 21.8%, while direct investment accounted for RMB 900 billion, up 33.6%.

The PBOC report is internally inconsistent on one point: its regional chapter gives 21.8% growth for goods-trade settlement, while its executive summary gives 21.6% for the same measure. We retain the detailed chapter’s figure here and draw no conclusion from the 0.2 percentage-point discrepancy.

Between 2020 and 2024, the total volume more than doubled, from RMB 4.2 trillion to RMB 8.9 trillion.

The PBOC also describes a far more mature infrastructure: at the end of 2024, 150 ASEAN financial institutions participated in CIPS, including 22 direct participants. CIPS had processed 954,000 cross-border RMB transactions involving ASEAN that year, worth RMB 21.2 trillion, up 95.6% in value.

Source: PBOC, RMB Internationalization Report 2025, pp. 95-96.

A wording warning matters here: the RMB 8.9 trillion figure is not simply exports and imports. It aggregates several categories of cross-border payments and financial flows. Calling it “RMB 8.9 trillion of trade invoiced in yuan” would overstate the evidence.

The cleaner trade number is the RMB 2.4 trillion of RMB settlement for China-ASEAN trade in goods.

That is already substantial.

Credit may be the deepest change

An international currency is not used only to pay. It is used to borrow.

On this front, data from the Bank for International Settlements (BIS) are particularly revealing.

Between Q1 2021 and Q1 2025, renminbi-denominated cross-border bank credit to emerging market and developing economy borrowers increased cumulatively by $373 billion, mainly in Asia-Pacific.

Over the same period, dollar-denominated cross-border credit to those borrowers declined cumulatively by $257 billion.

The BIS identifies 2022 as a turning point: monetary tightening by the Federal Reserve and the ECB made dollar and euro funding far more expensive while Chinese interest rates remained low.

Source: BIS, International banking statistics and global liquidity indicators at end-March 2025.

Again, the shortcut should be resisted. The $373 billion rise in RMB credit and the $257 billion decline in dollar credit do not prove a one-for-one currency substitution. Borrowers, maturities, banks and uses are not necessarily identical.

But the timing is strong enough for the BIS itself to describe a shift towards renminbi-denominated credit beginning in 2022.

The IMF reaches the same mechanism in its 2026 Article IV report on China: low Chinese interest rates boosted foreign demand for RMB funding, while clearing banks, CIPS and central-bank swap networks reduced the operational costs of using the currency.

Source: IMF, People’s Republic of China: 2025 Article IV Consultation, Box 6, January 2026.

The renminbi can therefore advance without persuading a central bank to replace Treasuries with Chinese bonds. It is enough for an Asian firm to find it cheaper or more convenient to borrow in RMB to finance China-linked trade or investment.

That may be the most important transformation to watch.

The dollar is still hidden inside the yuan market

Here is the paradox.

Renminbi trading is growing rapidly in FX markets. In the BIS 2025 Triennial Survey, CNY was on one side of 8.5% of global FX turnover, up from 7% in 2022.

Source: BIS, OTC foreign exchange turnover in April 2025.

But 96% of all CNY FX transactions were still against the US dollar in April 2025.

Source: BIS, Renminbi propels the growth of EME currency trading, December 2025.

That is an extraordinarily useful number.

Yuan trading can expand sharply while temporarily reinforcing the dollar’s role as the vehicle currency of the yuan market itself.

The same contrast appears in reserves.

Our guide to reading COFER explains the dataset’s perimeter and the valuation-effect trap.

In Q1 2026, the renminbi accounted for 1.99% of global foreign-exchange reserves tracked by the IMF. The dollar accounted for 57.13%. The IMF also notes that the RMB’s small rise from 1.95% in the previous quarter was driven mainly by valuation effects.

Source: IMF, COFER, 1 July 2026.

One Kazakh reserve number deserves caution

The PBOC report contains a striking claim: according to its data, the renminbi’s share of Kazakhstan’s foreign-exchange reserves reached 19% at the end of 2024, up 13 percentage points in one year.

That number deserves caution.

The IMF publishes no country-by-country currency composition in COFER; individual submissions are confidential. And the public National Bank of Kazakhstan report reviewed for this article breaks reserves into gold and foreign-currency assets, but does not provide a currency split that independently confirms the 19% figure.

Source of the claim: PBOC, RMB Internationalization Report 2025, p. 98.
On country-data confidentiality: IMF, COFER FAQ.

The figure may be correct. But in the public record available to us, it does not have the same independent verification as Kazakhstan’s FX turnover data.

In such a politically charged monetary story, distinguishing between an official Chinese figure and a publicly cross-checkable figure is not pedantry.

What is actually changing: three layers, three speeds

To understand the renminbi in Asia, separate three functions.

1. Settlement currency.
This is where the advance is clearest. An ASEAN or Central Asian firm buying Chinese goods can avoid an additional dollar conversion, reduce some FX costs and settle directly with its Chinese counterparty in RMB.

2. Funding currency.
This is the second layer and arguably the most important. If firms can borrow in RMB, issue RMB debt or obtain RMB bank liquidity, the currency stops being a payment tool and becomes a unit in which balance sheets are built.

3. Reserve and store-of-value currency.
This is where the gap remains enormous. At 1.99% of global FX reserves, the renminbi still lacks the depth, liquidity, convertibility and globally accessible pool of safe assets associated with the major reserve currencies.

The IMF identifies the constraints clearly: persistent capital-account restrictions, insufficient depth and liquidity in offshore RMB markets, a shortage of globally accessible safe RMB assets, and a shallower FX hedging market than those of the leading international currencies.

The “dollar or yuan?” debate therefore hides a more interesting reality:

the renminbi can become a major regional transaction and funding currency without becoming a major global reserve currency.

Why Asia is the natural testing ground

There is no mystery.

China sits at the centre of a vast share of Asian supply chains. When an importer buys in China, a Chinese group invests in ASEAN, a bank finances China-linked trade or a state has a swap line with the PBOC, demand for RMB has a concrete economic use.

Three accelerators have been added to that geography.

The first is interest-rate differentials. From 2022, US and European monetary policy tightened sharply while China remained in a much lower-rate environment. For some borrowers, RMB funding became more attractive.

The second is geopolitics. Kazakhstan shows how sanctions against a Russian channel can abruptly redirect demand into yuan. Other actors may also want to reduce dependence on one payment infrastructure or one currency without abandoning the dollar.

The third is infrastructure. A central-bank swap, a clearing bank, a CIPS participant or a directly traded currency pair does not create demand on its own. But it lowers the cost of expressing that demand.

This is a network strategy: the less cumbersome the renminbi is to use, the more reason China-linked flows have to remain in renminbi.

What Beijing has achieved, and what it has not

China has already achieved something significant: in a growing number of transactions directly involving China, the dollar is no longer technically indispensable.

That is not the same as saying the dollar is becoming irrelevant.

SWIFT, BIS and IMF data show that it remains the leading international payment currency, the leading reserve currency and the dominant vehicle currency in FX markets. Even the rise of CNY trading still runs overwhelmingly through the dollar.

The Reserve Bank of Australia’s August 2026 Bulletin, published on 27 August, reaches a comparable reading: international RMB use is rising but remains minor and is likely to progress gradually while capital-account opening and Chinese market depth remain limited.

But an international currency does not necessarily conquer the world in one leap. It can first create a zone of utility.

In ASEAN, that zone already has scale. In Central Asia, it has rapid growth and a powerful geopolitical engine. In Asian bank credit, it is beginning to create RMB-denominated balance sheets. And CIPS is progressively providing the rails that connect these uses.

The change is less theatrical than the “end of the dollar”.

It may be more durable.

The right question is no longer “when will the yuan replace the dollar?”

That question is badly framed.

The more useful test is to ask, country by country and sector by sector:

how many China-linked economic transactions still need the dollar in order to exist?

If a Malaysian company can be invoiced in RMB, borrow in RMB, hedge its FX risk, settle through a CIPS-connected bank and park short-term liquidity in RMB assets, China has gained something important even if Malaysia’s central bank continues to hold most of its reserves in dollars.

That is the architecture the Asian data are beginning to reveal.

The renminbi is not dethroning the dollar.

It is building, around China, a space in which the dollar becomes optional one transaction at a time.

That is probably how a monetary zone begins.

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Primary and institutional sources

• People’s Bank of China, RMB Internationalization Report 2025.
• Bank for International Settlements, International banking statistics and global liquidity indicators at end-March 2025.
• Bank for International Settlements, Renminbi propels the growth of EME currency trading.
• Bank for International Settlements, OTC foreign exchange turnover in April 2025.
• International Monetary Fund, People’s Republic of China: 2025 Article IV Consultation, Box 6.
• International Monetary Fund, COFER, Q1 2026.
• SWIFT, Global Currency Tracker, August 2026.
• CIPS, operating statistics and worldwide participants.
• National Bank of Kazakhstan, Financial Stability Report of Kazakhstan 2024.
• National Bank of Kazakhstan, PBOC swap agreement, 4 August 2026.
• Eldik Bank, connecting banks to CIPS through Eldik Bank, 19 August 2026.
• Reserve Bank of Australia, Developments in RMB Internationalisation, 27 August 2026.

Starting point for the investigation: Les Echos, “La Chine accélère son offensive monétaire en Asie centrale”, 31 August 2026. The figures and conclusions in this l0g article were reconstructed from the primary sources listed above.