Yuan Adoption Tracker Update: Q3 2025

Tracking Renminbi Internationalization Amid Global Economic Realignment

Executive Summary

The third quarter of 2025 has been a period of significant and complex developments in the internationalization of the Chinese renminbi (RMB). While the yuan has shown resilience and made notable inroads in specific areas, its path to becoming a major global currency remains uneven. This report analyzes the key trends and events from Q3 2025, providing a data-driven assessment of the RMB's progress.

Key developments in Q3 2025 include a rebound in the yuan's share of global payments, the completion of a landmark debt-to-yuan conversion in Africa, and the continued expansion of China's alternative financial infrastructure. These advancements, however, are set against a backdrop of persistent challenges, including China's own economic headwinds and the enduring dominance of the US dollar.

This quarterly update draws on a wide range of sources, including official data from central banks and financial institutions, to provide a comprehensive overview of the yuan's evolving international role. The report examines country-level adoption, trade settlement trends, infrastructure developments, and the broader geopolitical context shaping the future of the global monetary system.

Key Takeaways

• Yuan's Share of Global Payments Rebounds: After a dip in the second quarter, the yuan's share of global payments, as tracked by SWIFT, recovered to 3.17% in September 2025, up from 2.89% in May. This demonstrates the currency's resilience but also its volatility in the face of global economic shifts.

• Kenya Completes Landmark Debt Conversion: In a first for Africa, Kenya finalized the conversion of $3.5 billion in railway loans from US dollars to yuan in October 2025. This move is expected to save Kenya $215 million annually in debt-servicing costs and sets a precedent for other nations in the region, with Ethiopia already in negotiations to follow suit.

• Alternative Financial Infrastructure Expands: China has continued to build out its own financial infrastructure, with the digital yuan cross-border settlement system connecting to 16 countries and the mBridge platform gaining traction. In a significant development for the aviation industry, the International Air Transport Association (IATA) added the yuan as a settlement currency, with a pilot program launched in November 2025.

• Russia Deepens Reliance on Yuan: Amid ongoing Western sanctions, Russia has intensified its use of the yuan. As of November 2025, 99.1% of Russia-China trade is settled in either rubles or yuan, and Russia is planning to issue its first-ever sovereign yuan-denominated bond.

• Trade Settlement in Yuan Continues to Grow: Nearly one-third of China's $6.2 trillion in global trade is now settled in yuan, a significant increase from 20% in 2022. This trend is supported by the increasing willingness of Chinese firms to convert their export earnings from dollars to yuan.

Looking ahead, the internationalization of the yuan is likely to proceed along a dual track: rapid progress in specific regions and sectors where China has significant economic leverage, and a more gradual, challenging path to broader global acceptance. The developments in Q3 2025 underscore the complex interplay of economic pragmatism, geopolitical strategy, and technological innovation that will shape the future of the global monetary landscape.

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SWIFT Payment Metrics: A Volatile Recovery

The yuan's performance in global payments, as measured by SWIFT, has been a key indicator of its international traction. The third quarter of 2025 saw a notable recovery from a slump in the previous quarter, though the currency has yet to reclaim its all-time high. This volatility highlights the challenges the yuan faces in achieving stable, long-term growth in its global role.

In September 2025, the yuan's share of global payments reached 3.17%, a significant increase from its May 2025 low of 2.89% [1]. This rebound brought the yuan back to the 5th position among global payment currencies. However, this is still below the 4th position it held in late 2024 and early 2025, and well below its peak of 4.74% in July 2024 [2].

The table below summarizes the yuan's SWIFT ranking and market share over the past year, illustrating the currency's fluctuating fortunes:

Quarter	Month	SWIFT Ranking	Market Share (%)
Q4 2024	November 2024	4th	3.89
Q1 2025	February 2025	4th	4.33
Q2 2025	May 2025	6th	2.89
Q3 2025	September 2025	5th	3.17

Source: SWIFT RMB Tracker [1] [3] [4]

This data suggests that while the yuan has a solid floor of support, its growth is not yet linear. The decline in Q2 2025 was attributed to a general decrease in all payment currencies, but the yuan's drop was more pronounced. The subsequent recovery in Q3 indicates that the currency is regaining ground, but it also underscores the competitive pressures it faces from other major currencies.

The yuan's journey to becoming a top-tier global payment currency will likely be characterized by periods of rapid growth followed by consolidation and even temporary setbacks. The underlying trend, however, remains one of gradual internationalization, driven by China's economic weight and the deliberate efforts of its government and financial institutions to promote the currency's use.

Country-Level Developments

The third quarter of 2025 and the period immediately following have been marked by several significant country-level developments that highlight the strategic nature of yuan adoption. Rather than a broad-based global shift, the yuan is making inroads in specific countries and regions where China's economic influence is strongest, and where there are clear pragmatic benefits to using the currency.

Kenya: A Landmark Debt Conversion in Africa

In what is arguably the most significant development of the quarter, Kenya completed the conversion of $3.5 billion in railway loans from US dollars to yuan in October 2025 [5]. The loans, which were used to finance the Standard Gauge Railway from Mombasa to Nairobi, were originally denominated in dollars, and the switch to yuan is expected to save Kenya approximately $215 million annually in debt-servicing costs [6].

This move represents a major milestone for yuan internationalization in Africa, as it is the first time an African nation has undertaken such a large-scale debt conversion. The decision was driven by clear economic pragmatism, as the yuan's lower interest rates compared to the dollar will provide Kenya with significant fiscal relief. The conversion also has strategic implications, as it deepens Kenya's economic ties with China and reduces its exposure to the volatility of the US dollar.

Further underscoring the yuan's growing importance in Kenya, the Central Bank of Kenya's June 2025 Quarterly Economic Review revealed that the yuan now accounts for 5% of the country's official foreign reserves [7]. This dual development—the debt conversion and the inclusion of the yuan in reserves—has led to an upgrade in Kenya's status in the Yuan Internationalization Tracker from "Bilateral Trade Settlement" to "Adopted By Central Bank."

Ethiopia: The Next Domino?

Following Kenya's lead, Ethiopia has entered into negotiations with China to convert a portion of its $5.38 billion debt to yuan-denominated loans [8]. The talks, which began in September 2025, involve high-level discussions between Ethiopia's central bank governor and Chinese financial institutions, including the Export-Import Bank of China and the People's Bank of China.

Ethiopia, which defaulted on its debt in 2023, is seeking to restructure its liabilities and reduce its debt-servicing burden. The potential conversion to yuan offers a path to achieving these goals, and the negotiations signal a growing trend among African nations to explore yuan-based financing as an alternative to traditional dollar-denominated debt. Ethiopia's status in the tracker has been updated to "Considering/Negotiating Adoption" to reflect these ongoing talks.

Russia: From Lifeline to Noose

Russia's financial integration with China reached near-total levels in Q3. As of November 2025, an astonishing 99.1% of Russia-China trade is now settled in either rubles or yuan, up from 90% in late 2024 [9]. Furthermore, the yuan now accounts for approximately 30% of Russia's total external trade, a dramatic increase from just 2% in 2022 [10].

Russia has become a captive and significant ecosystem for the yuan, providing it with guaranteed, large-scale transaction volumes. The planned issuance of Russia's first sovereign yuan bond will further institutionalize the currency, creating a new channel for yuan-denominated financing and investment outside of Chinese markets [11].

Kazakhstan and South Korea: Solidifying Ties

Other developments showed a deepening of existing relationships. Kazakhstan began conducting cross-border settlements with China in yuan in November, a key step in the de-dollarization of Central Asian trade [13]. Meanwhile, South Korea renewed its 400 billion yuan currency swap line for another five years, a move aimed at ensuring financial stability and facilitating the massive trade flows between the two neighbors [14]. Both actions reinforce the yuan's role as the dominant regional currency in Asia.

Infrastructure Developments: Building an Alternative Financial Architecture

A key pillar of China's strategy to internationalize the yuan is the development of its own financial infrastructure, independent of the US-dominated global system. The third quarter of 2025 saw significant progress in this area, with the expansion of the digital yuan's cross-border capabilities, the maturation of the mBridge platform, and new regulatory frameworks for yuan-linked stablecoins.

The Digital Yuan: Expanding Cross-Border Settlement

On March 17, 2025, the People's Bank of China announced the full integration of its digital RMB cross-border settlement system, connecting with ten ASEAN countries and six Middle Eastern countries [15]. This development is a major step forward in the internationalization of the digital yuan (e-CNY) and creates a new channel for fast, low-cost cross-border payments that bypasses the traditional correspondent banking system.

The digital yuan's "lightning payment" capability, which allows for transactions to be settled in seconds, has already been demonstrated in a test between Hong Kong and Abu Dhabi, where a company paid a Middle Eastern supplier in digital RMB, reducing handling fees by 98% [15]. The system also incorporates automated anti-money laundering (AML) controls, which has attracted the interest of 23 central banks that have joined the digital currency bridge test.

Hong Kong: A Launchpad for Yuan-Linked Stablecoins

Hong Kong has positioned itself as a key hub for the internationalization of the yuan with the implementation of its Stablecoins Ordinance on August 1, 2025 [17]. This new regulatory framework provides a clear legal basis for the issuance and operation of yuan-linked stablecoins, which could become an important vehicle for the use of the yuan in the digital asset ecosystem.

By creating a regulated environment for yuan-based stablecoins, Hong Kong is aiming to attract digital asset firms and promote the use of the yuan in a wide range of applications, from cross-border payments to decentralized finance (DeFi).

IATA: Yuan Takes Flight in the Aviation Industry

Beyond bilateral agreements, the yuan gained a foothold in a new global industry. The International Air Transport Association (IATA) added the yuan as a settlement currency, launching a pilot program with two major Chinese airlines in November [18]. This move allows global carriers and suppliers to settle payments in yuan, potentially reducing costs and creating a new area of functional use for the currency.

This move is expected to reduce foreign exchange costs and simplify payment processes for airlines and other industry participants, and it represents a major step forward in the adoption of the yuan in a key global industry.

Taken together, these infrastructure developments demonstrate a concerted effort by China and its partners to build a more multipolar international financial system. While these new platforms and frameworks are still in their early stages, they have the potential to significantly alter the global financial landscape in the years to come.

Trade Settlement Trends: A Gradual but Steady Shift

The increasing use of the yuan in international trade settlement is a cornerstone of its internationalization. The third quarter of 2025 has seen a continuation of this trend, with the yuan solidifying its role as a significant currency for trade, particularly in transactions involving China and its key trading partners.

As of 2025, nearly one-third of China's massive $6.2 trillion in global trade is now settled in yuan, a substantial increase from just 20% in 2022 [2]. This shift is driven by a combination of factors, including the lower transaction costs and reduced foreign exchange risk for Chinese firms, as well as the growing willingness of international partners to accept the yuan.

In March 2025, the yuan reached a new milestone, with 54.3% of China's cross-border trade being settled in the currency [19]. This demonstrates the rapid pace of yuan adoption in China's own trade, a trend that is being actively encouraged by the Chinese government.

Challenges and Constraints

Despite the positive developments in Q3 2025, the internationalization of the yuan is not without its challenges. The currency faces significant headwinds that will likely temper its growth and prevent it from mounting a serious challenge to the dollar's dominance in the near term. The yuan's fluctuating share of SWIFT payments, as seen in the drop from 4th to 6th place in Q2 2025, highlights the currency's vulnerability to global economic shifts and the competitive pressures it faces from other major currencies. The Yuan's steady share of global foreign exchange reserves remains small, at just over 2% [20]. This limits its appeal as a safe-haven asset and a store of value where gold has been dominant.

Outlook: Key Signposts for Q4 2025

The third quarter's activity is a reminder that the yuan's internationalization is piecemeal process of strategic, opportunistic gains rather than a linear global ascent. The landmark debt conversion in Kenya, coupled with the rebound in SWIFT payments, underscores the currency's growing utility in specific geopolitical and economic contexts. However, the persistent volatility and the structural constraints of China's capital controls serve as a constant reminder of the long road ahead.

As we move into the final quarter of 2025, the key areas to watch will be the tangible outcomes of the new infrastructure plays. Will the IATA settlement system see broad adoption beyond its pilot phase? Will Ethiopia's negotiations with China yield a concrete agreement, setting off a chain reaction of similar deals in Africa? And will Russia's planned sovereign yuan bond be successfully placed, creating a new, significant channel for yuan-denominated financing?

The developments of Q3 have set the stage for these critical next steps. The yuan's trajectory is no longer a theoretical debate but a series of real-world tests. The results of these tests in the coming months will provide a clearer picture of the currency's true momentum and its potential to reshape the global financial landscape as we head into 2026.

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References

[1] Global Times. (2025, October 23). Use of Chinese yuan reaches 3.17% in global payments in September. https://www.globaltimes.cn/page/202510/1346329.shtml

[2] Deutsche Welle. (2025, November 3). China's Yuan tops dollar in trade but struggles persist. https://www.dw.com/en/china-yuan-us-dollar-trade-currency-trump-tariffs-graphics/a-74593975

[3] SWIFT. (2024, December). RMB Tracker December 2024. https://www.swift.com/swift-resource/252355/download

[4] SWIFT. (2025, February). RMB Tracker February 2025. https://www.swift.com/sites/default/files/files/rmb-tracker_february-2025.pdf

[5] Reuters. (2025, October 8). Kenya converts $3.5 billion loans from China into yuan to save on interest. https://www.reuters.com/world/africa/kenya-converts-railway-loan-china-into-yuan-save-interest-2025-10-07/

[6] Bloomberg. (2025, October 7). Kenya Snags $215 Million in Savings After Chinese Loan Currency Swap. https://www.bloomberg.com/news/articles/2025-10-07/kenya-snags-215-million-saving-after-chinese-loan-currency-swap

[7] The Independent (Uganda). (2025, November 4). More African countries are embracing the yuan. https://www.independent.co.ug/more-african-countries-are-embracing-the-yuan/

[8] Bloomberg. (2025, October 20). Ethiopia in Talks With China to Convert Dollar Loans to Yuan. https://www.bloomberg.com/news/articles/2025-10-20/ethiopia-in-talks-with-china-to-convert-dollar-loans-into-yuan

[9] Anadolu Agency. (2025, November 5). Russia, China conduct over 99% of trade in national currencies, says official. https://www.aa.com.tr/en/world/russia-china-conduct-over-99-of-trade-in-national-currencies-says-official/3734770

[10] Visegrad Insight. (2025, November 4). China and the War in Ukraine: How Beijing Supports Russia. https://visegradinsight.eu/china-and-the-war-in-ukraine/

[11] Reuters. (2025, October 31). Russia plans to issue debut sovereign yuan-denominated bonds, sources say. https://www.reuters.com/markets/europe/russia-plans-issue-debut-sovereign-yuan-denominated-bonds-sources-say-2025-10-31/

[12] Atlantic Council. (n.d.). Central Bank Digital Currency Tracker. https://www.atlanticcouncil.org/cbdctracker/

[13] EADaily. (2025, November 5). Dollar, goodbye: Kazakhstan started making cross-border settlements with China in yuan. https://eadaily.com/en/ampnews/2025/11/05/dollar-goodbye-kazakhstan-started-making-cross-border-settlements-with-china-in-yuan

[14] Reuters. (2025, November 1). China, South Korea sign FX swap and other economic agreements, Seoul says. https://www.reuters.com/world/asia-pacific/china-south-korea-sign-fx-swap-other-economic-agreements-seoul-says-2025-11-01/

[15] Akhilesh.info. (n.d.). The Digital Yuan Revolution: How China is Redefining Global Finance and Challenging Dollar Dominance. https://www.akhilesh.info/the-digital-yuan-revolution-how-china-is-redefining-global-finance-and-challenging-dollar-dominance/

[16] Bank for International Settlements. (2024, November 11). Project mBridge reached minimum viable product stage. https://www.bis.org/about/bisih/topics/cbdc/mcbdc_bridge.htm

[17] Finance Magnates. (2025, October 13). From Hong Kong to Global Trade: China's Bid to Put the RMB on the Stablecoin Map. https://www.financemagnates.com/cryptocurrency/from-hong-kong-to-global-trade-chinas-bid-to-put-the-rmb-on-the-stablecoin-map/

[18] TRT World. (2025, November 6). IATA adds yuan as a settlement currency, boosting internationalization. https://www.trtworld.com/article/61218743ae2c

[19] Convergence TFS. (2025, July 21). China's Quiet Currency Shift: How the Yuan Is Changing Trade Finance in Asia. https://www.convergence-tfs.com/blog/chinas-quiet-currency-shift-how-the-yuan-is-changing-trade-finance-in-asia/

[20] The Star (Malaysia). (2025, November 6). As China holds the line in 'trade war 2.0', its yuan follows suit. https://www.thestar.com.my/aseanplus/aseanplus-news/2025/11/06/as-china-holds-the-line-in-trade-war-20-its-yuan-follows-suit