Russia has reportedly scaled back its efforts to replace the US dollar with China’s yuan in international trade, marking a setback for its long-running campaign to reduce dependence on the American currency.
The shift comes amid increased US secondary sanctions targeting foreign financial institutions that facilitate transactions involving Russia. The restrictions, expanded in 2024, have discouraged Chinese banks from processing Russian payments for fear of facing penalties from Washington.
US Sanctions Undermine Russia-China Currency Trade
The yuan’s share of Russia’s export payments reportedly fell to 22% in 2026, highlighting the difficulties Moscow faces in expanding the use of alternative currencies.
Despite growing trade relations between Russia and China, Chinese financial institutions have become increasingly cautious about handling Russian transactions. This has forced some Russian businesses to rely on smaller regional banks and financial intermediaries to process payments.
The development has complicated Russia’s efforts to establish alternative international payment channels and reduce its exposure to the US financial system.
Chinese Yuan Struggles to Gain Global Ground
Although Russia has increasingly relied on the yuan for bilateral trade with China, the Chinese currency has struggled to gain significant international acceptance.
The yuan accounts for less than 3% of global trade settlements, reflecting its limited reach compared with the US dollar, which continues to dominate international payments and financial transactions.
The reluctance of major Chinese banks to risk US sanctions has further weakened the yuan’s position as a practical alternative for Russian businesses operating in international markets.
Setback for BRICS De-Dollarisation Ambitions
Russia’s retreat highlights the challenges facing efforts by BRICS members to reduce reliance on the US dollar and promote alternative currencies in global trade.
Moscow has been among the strongest advocates of de-dollarisation, encouraging greater use of national currencies in transactions among member countries.
However, the latest developments suggest that political support for alternative payment systems may not be enough to overcome the influence of the US financial system, particularly when international banks face the risk of sanctions.
While Russia’s reduced reliance on yuan transactions represents a setback, it does not necessarily mean the broader BRICS de-dollarisation agenda has been abandoned.
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