📉 Banks and companies are shifting to transact in yuan, euros, UAE dirhams, instead of using USD as before.
🔁 Why avoid the dollar?
- Trade tensions
- Fear of the dollar being weaponized through sanctions
- Modern technology makes cross-border transactions easier
- The share of dollar transactions is expected to decrease by about 6% in 2025
🇨🇳 China is accelerating the internationalization of the yuan
- In March 2025, yuan accounted for 4.1% of total global transactions - still low compared to 49% of USD, but steadily increasing.
- China's cross-border payment system (CIPS) reached 175 trillion yuan/year, an increase of over 40% compared to the previous year.
🚗 Who is using the yuan?
- European car manufacturers are using yuan to hedge against risks
- Banks in Indonesia are setting up separate tables to handle rupiah-yuan transactions.
- China has signed currency payment agreements with Brazil, Indonesia, UAE...
🪙 Why is this trend important?
- For a long time, USD has been used as an intermediary for most transactions.
For example: An Egyptian company wants to exchange Philippine pesos → must buy USD → then can buy pesos.
- Now many companies want to skip the USD intermediary step to save costs and avoid risks.
🌍 The dominance of the dollar is shaking
- According to Deutsche Bank, if nothing changes, USD will still maintain its position.
- But currently, there are groundbreaking changes happening.
- This is the first time in many decades that the role of USD is facing a real challenge.
💥 Mr. Trump also wants to accelerate this process
- He frequently criticizes the Fed, claiming a strong USD is detrimental.
- He also values Stephen Miran - a supporter of changing the global financial order
In summary:
- Although the dollar will still be king, that position is no longer 'invulnerable'.
- If countries collectively avoid the dollar, the global financial order will undergo significant changes in the next 5-10 years.
- What do you think if in the future traveling requires carrying yuan instead of dollars?