Until now, we knew about China’s hegemonic ambitions in economic matters. The desire of the Asian ogre and its BRICS partners to get rid of the dollar is essentially the expression of this ambition. The latter has seen recent progress involving the euro, the currency used in the European area.
BRICS country’s currency overtakes euro in SWIFT-related operations
Would the yuan, the currency of China, a major player in the BRICS, tend to impose itself in international transactions? This is what recent information communicated by the financial network SWIFT seems to suggest.
Its data reveal that the Chinese currency is the second most used currency in international transactions. Positioned just behind the dollar, the yuan has notably surpassed the euro.
The use of the European currency is in sharp decline. Indeed, cross-border transactions involving the euro increased from 32.64% to 31.74%, a drop of almost 0.9% recorded between August and September 2023.
It is exactly the opposite phenomenon that occurred for China’s currency over the same period. The currency of this BRICS giant has continued to close the gap, reaching a remarkable level of 3.71% in September, an increase of 2.77% from the previous month in August 2023.
Towards a hegemony of the Chinese currency on the financial market?
This is the first time in the last 20 months that the Chinese yuan has exceeded the 3% threshold. This advance strengthened the grip of the Chinese currency from 41.74% to 42.71% during the same period.
Obviously, these percentage differences appear modest to say the least. But they are quite indicative of the radical change currently taking place in the movements of the global currency market.
By overtaking the euro in international transactions, the yuan consolidates its position as the second most used currency on the SWIFT network. A result reflecting the decreasing role of the euro in international SWIFT payments.
The European currency hit its lowest level in three years, while the Chinese yuan peaked at its highest level in five months. This is again a sign of the progressive transformation that the world economy is experiencing. Particularly since BRICS launched the dedollarization campaign at the beginning of the year. A policy which, according to analysts, could benefit the emerging crypto industry.
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