China's currency, the Yuan, surpasses the US dollar in both import and export trade with the country.
The landscape of cross-border payments has undergone a significant shift in recent years, with the Chinese Yuan (CNY) steadily gaining ground against the US Dollar (USD). This trend was first observed in March 2023, and since then, CNY has consistently taken a greater share in both outbound and inbound non-banking cross-border payments.
In a remarkable turn of events, CNY has surpassed USD in both inbound and outbound cross-border payments for two consecutive months, as of the latest data. This marks the second consecutive month that both inbound and outbound payments in CNY account for more than 50% of all non-banking cross-border payments.
Outbound non-banking cross-border payments from China have seen CNY take a greater share every month since March 2023. In March 2024, USD made up its third-lowest share ever in outbound payments from China, at 41.4%. Similarly, inbound cross-border payments in CNY have also surpassed those in USD for the same period.
The rise of CNY in cross-border payments is not a recent phenomenon. In fact, CNY passed the 25% mark for outbound payments in 2013 and for inbound payments in 2014. At the start of 2010, CNY accounted for less than 1% of both inbound and outbound cross-border payments.
The increasing dominance of CNY in cross-border payments has been influenced by a variety of factors. One of the key drivers has been the increased volumes of cross-border payments, which have grown by over 600% between 2010 and 2024.
Data from cross-border payments on platforms has strongly influenced cross-border payments policy by highlighting the need for stricter data security, enhanced regulatory compliance, and adoption of advanced payment technologies. This has led to new policies such as the U.S. Department of Justice’s (DOJ) strict Data Security Program rules that limit transfers of sensitive personal or government-related data to foreign entities linked to countries of concern.
Moreover, insights from payment data have driven increased emphasis on data privacy frameworks like the EU’s GDPR and comprehensive cross-border data privacy strategies. Companies must now adopt flexible, transparent, and accountability-based approaches to data governance, reflecting findings from cross-border data flows and the complex regulations surrounding them.
On the technology front, analysis of cross-border payment data has encouraged the adoption of ISO 20022 messaging standards, which offer richer data, faster processing, and enhanced interoperability—changing how policy promotes real-time, inclusive cross-border payments.
However, the volatility of year-on-year changes in cross-border payments has been influenced by wider macroeconomic uncertainty. Despite this, China's exports and imports are expected to rise above forecasts in April 2024.
In sum, data generated and analyzed on cross-border payments platforms has underpinned tighter regulatory rules on data transfer and privacy, encouraged technology-driven compliance solutions such as permissioned DeFi, and informed standards adoption to make payments faster and more secure, all of which shape current cross-border payments policy.
- The increased dominance of CNY in cross-border payments has been influenced by factors such as the growth in cross-border payment volumes and the implementation of stricter data security and regulatory compliance measures.
- With its continued growth in non-banking cross-border payments, the Chinese Yuan (CNY) has become a significant player in both inbound and outbound cross-border payments, competing with established currencies like the US Dollar (USD) in the finance and industry sectors.
