Every month, the international organization SWIFT releases the global currency payment rankings.
The list in April this year showed that the RMB’s ranking dropped from fifth to sixth, and its share also fell from 3.10% to 2.85%.
However, in the same month, the single-day processing volume of the RMB cross-border clearing system set a new historical record.
This has led to a strange phenomenon: on one hand, the ranking is falling, and on the other hand, the transaction volume is rising.
The U.S. dollar topped the list with a share of more than 50%, and the euro ranked second with about 21%.
Together, these two companies account for more than 70% of global payments.
The RMB only accounts for 2.85%, ranking sixth.
But there is a problem. There are about 20 member countries in the Eurozone, and transactions between countries in the zone are all counted as “international payments” in the SWIFT ledger. This is just like how neighbors transferring money to each other in an apartment building is counted in “cross-city transaction statistics.” If this shell is peeled off, the true cross-border circulation capacity of the euro will be greatly reduced.
SWIFT itself is not a settlement system, but more like a message “post office” through which instructions for cross-border remittances are transmitted.
If a RMB transaction goes through China’s own cross-border clearing system CIPS, it will not appear in SWIFT’s ledger.
The CIPS network has extended to more than 190 countries and regions around the world, with more than 1,700 participating institutions. Its single-day historical transaction volume is almost the GDP of a medium-sized country for an entire year. This money is invisible in the SWIFT ledger, but it is actually flowing.
If you do not look at payments but only trade financing, the RMB accounts for more than 8% of the world, ranking second in the world, second only to the U.S. dollar; in the foreign exchange market, the RMB accounts for nearly 9%, ranking fifth.
For the same currency, the ranking in another dimension can differ by five points.
China’s economic volume accounts for nearly 17% of the world’s total, while the RMB’s share in SWIFT is less than 3%. This gap proves the existence of statistical blind spots.
The RMB has been jumping repeatedly between the fourth and sixth positions for many years. Rather than seeing it as bad news, it is better to see it as a norm.
Looking at the hegemony of the US dollar, in 1974 the United States and Saudi Arabia agreed that Saudi Arabia would only accept US dollars when selling oil, and the “petrodollar” took shape.
But now there are cracks in this foundation. In the Middle East’s crude oil trade with China, the proportion settled in RMB has historically exceeded 40%. The proportion of RMB in Saudi Aramco’s sales to China has jumped from 15% to 45% in less than a quarter.
All of Iran’s oil exports to China switched to RMB, bypassing SWIFT. Three weeks after Iraq opened RMB settlement, the share reached more than 60%.
The United States uses sanctions as a weapon, making Middle East oil-producing countries worried about the freezing of foreign exchange reserves, prompting them to diversify risks. Choosing RMB settlement is also a hedge against the uncertainty of the US dollar.
Russia is an extreme case. After the United States sanctioned the Moscow Stock Exchange in 2024, the RMB’s share of the Russian foreign exchange market soared from just over 50% to nearly 100%.
Reserve data from global central banks also shows that the U.S. dollar’s share of global foreign exchange reserves has fallen to its lowest point since 1994, while gold purchases by global central banks have exceeded 800 tons for three consecutive years.
There is a project called “Money Bridge” (mBridge), which is a cross-border payment infrastructure built by the People’s Bank of China and central banks of many countries.
From the pilot to the present, the cumulative transaction scale has expanded approximately 2,500 times in two or three years. In June this year, Macau just announced its participation.
The most essential difference between it and SWIFT is speed and cost. The goal is to receive payments in seconds and reduce the rate by more than half. In its distributed architecture, no participant can unilaterally “pull the plug”, which is in sharp contrast to SWIFT.
On the financing side, the attractiveness of the RMB is also growing. Foreign banks are vying to issue RMB bonds in China. The cumulative issuance scale of the Panda bond market has exceeded one trillion yuan and the growth rate is accelerating.
However, the RMB accounts for less than 2% of global foreign exchange reserves. The transition from “usage” to “trust” is the most difficult hurdle for currency internationalization.
Zhou Xiaochuan, former governor of the People’s Bank of China, said that now is the “golden window period” to promote the internationalization of the renminbi. Although the renminbi has not yet won, the time for building new infrastructure may be more mature than ever.
RMB is ranked sixth on the SWIFT monthly list, but another bill being written may have a completely different ranking.
