Russia’s Push to Replace Dollar With China’s Yuan Collapses

Russia has effectively given up its effort to replace the dollar with the yuan in foreign trade because of U.S. secondary sanctions, according to Bloomberg and Meduza. UA.News reported that the aggressor state abandoned this attempt as the yuan's share in settlements for Russian exports fell by half from its 2024 peak to 22%. Bloomberg noted that Russia retreated from China's yuan as U.S. sanctions bolster the dollar, with Tribune Online and Bloomberg both highlighting the collapse of the replacement plan.

After launching its full-scale war with Ukraine and facing Western sanctions, Russia aggressively shifted its foreign trade settlements to the yuan. By 2024, the Chinese currency accounted for nearly half of the country's foreign trade settlements, became the most traded currency on the Moscow Exchange, and overtook the dollar in bank deposit volume, as reported by Meduza and UA.NEWS. This momentum shifted after the United States tightened secondary sanctions against banks in June 2024.

Fearing restrictions, Chinese financial institutions began cutting off cooperation with Russia, freezing payments, and returning funds to senders. Meduza and UA.NEWS reported that Russia now receives 69% of its export revenue from trade with Asian countries in rubles, and the yuan's share of global payments has returned to its pre-war level.

While some payment channels still work, sources at companies that help Russian businesses make payments to China told Bloomberg that none guarantees successful transactions. Many transactions now run through intermediaries rather than directly through banks, according to Bloomberg, Meduza, and UA.NEWS.