BRICS Start of De-Dollarization: 52% of Trade in China Settled in Yuan

The global financial landscape is shifting, and the BRICS nations (Brazil, Russia, India, China, and South Africa) are playing a central role. A key development is the increasing use of local currencies, particularly the yuan, in international trade. Recent data shows that 52.9% of all trade in China was settled in yuan by March 2025. Only 42.8% of trade was settled in US dollars, a significant drop, signaling a move away from dollar dominance.

This trend is closely linked to the ambitions of the BRICS alliance. BRICS plans to transform the international monetary and financial system, and debated potential policies at the 2025 summit in Kazan, Russia. A core objective is to reduce reliance on the US dollar, a process known as de-dollarization. This involves promoting the use of member countries' currencies in cross-border transactions, investment, and reserve holdings.

The increase in yuan-denominated trade in China is a concrete example of this strategy in action. If other BRICS members follow China's lead, the impact on the US dollar's global standing could be substantial. The Kazan summit likely addressed mechanisms to facilitate this currency diversification, including common payment systems and frameworks for mutual currency convertibility.

While the de-dollarization process is complex and faces challenges, the momentum appears to be building. The fact that over half of China's trade is now settled in yuan underscores the growing significance of alternative currencies in the global economy. Can it successfully challenge the dollar's long-held position as the world's reserve currency remains to be seen, but the BRICS nations are determined to reshape the international financial order.