This is according to the latest data from the State Administration of Foreign Exchange (SAFE), an agency within the People's Bank of China, the Chinese central bank. SAFE recorded that cross-border payments and receipts in the yuan rose to a record-high $549.9 billion in March, from $434.5 billion a month earlier. (Related: Saudis consider using yuan over dollar in oil sales; move could signal collapse of petrodollar and the American economy.)
This also accounts for 48.4 percent of all cross-border transactions in March. The use of the U.S. dollar in March also declined to 46.7 percent of transactions from 48.6 percent of cross-border payments a month earlier.
SAFE noted that the volume of cross-border transactions covers both current and capital accounts.
This rise comes as Beijing has been promoting the use of the yuan to settle cross-border trades as part of its own efforts to internationalize the use of the renminbi – the the official name of China's currency – and to move away from using and relying too much on the U.S. dollar in international trade.
This process has sped up the past year against the backdrop of sweeping sanctions imposed by Western nations against Russia for its special military operation in Ukraine, which led to Russia's dollar holdings overseas being locked away from Moscow.
Other nations have also been boosting their use of alternative currencies in transactions, including India and especially Russia. Policymakers in the former have taken steps towards shifting away from the U.S. dollar. New Delhi is making efforts to make sure that mutual trade with Moscow is conducted either with the Russian ruble or the Indian rupee.
In Russia, President Vladimir Putin has openly discussed using the Chinese renminbi, not only in trade with China, but also in Russian transactions with nations in Africa and South America. The Bank of Russia, the country's central bank, is already ramping up its use of the yuan in foreign transactions, and now accounts for more volumes than either the U.S. dollar or the euro on Moscow's currency exchanges.
Despite this news, the yuan's use in all global trade and cross-border transactions still remains low and the American dollar still dominates. But the yuan's place in international trade is steadily increasing, albeit slowly.
"Yuan internationalization is speeding up as other countries seek an alternative payment currency to diversify risks and as the credibility of the Federal Reserve is not as good as before," said Chris Leung, chief China economist at the Singapore-based DBS Bank. "But at the same time, we are still talking about a long way from dollar dominance, and the yuan's share in global payment might be forever small."
Data from SWIFT, the leading organization that provides services for executing international financial transactions and payments, found that the yuan's share of global currency transactions for trade finance rose to 4.5 percent in March. The U.S. dollar accounted for 83.71 percent of transactions.
For all global payments, the yuan represents an even lower percentage of all transactions at 2.3 percent in March.
"The rise in yuan usage could be a natural consequence of China opening up its capital account, with rising inflows for China bonds and outflows for Hong Kong stocks," noted Stephen Chiu, chief Asia foreign exchange and rates strategist for Bloomberg Intelligence.
SAFE noted that the rise in the share of the yuan being used allows local companies to reduce the risks of losing money due to currency mismatches in transactions. The State Council – China's main administrative body – said it will promote further efforts to keep expanding the use of the yuan in cross-border transactions as Beijing boosts foreign trade.
Learn more about the global de-dollarization process at DollarDemise.com.
Watch this episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, discusses the acceleration of the global de-dollarization process, with China, India and Brazil working together to ditch the American dollar.