Russia and Iran are accelerating their move away from the U.S. dollar and toward the Chinese yuan as Western sanctions and geopolitical pressures deepen, according to a new report.
The global financial landscape is undergoing a tectonic shift as the conflict between the West and a growing coalition of sanctioned nations accelerates a move away from the U.S. dollar. Fueled by recent military strikes and a tightening net of sanctions, Iran and Russia have ramped up their use of the Chinese yuan and cryptocurrencies to sustain trade and fund state operations.
A recent report by Nikkei indicates the use of the yuan to pay for crude oil and other commodities has soared. Settlements on China’s Cross-border Interbank Payment System (CIPS)—Beijing’s alternative to the Western-led SWIFT network—hit about $214 billion (1.46 trillion yuan) in March. That represents a 50% increase from the previous month and triple the level seen in 2021.
This surge comes as Iran takes drastic measures in response to a U.S.-Israeli air campaign that began in February. Tehran has effectively closed the Strait of Hormuz to “unfriendly nations,” while allowing passage to ships from China, Russia and India.
To bypass traditional banking, Iran has implemented a system of security tolls for vessels transiting the chokepoint, with payments reportedly demanded in yuan or cryptocurrency.
