Yuan Overtakes JPY in Cross Border Payments

The recent rocky ride for China’s markets has helped the country’s currency take another step toward a bigger global presence.

In August, for the first time, the yuan moved ahead of Japan’s yen for fourth place in a league table of the most-used currencies for cross-border payments compiled by Swift, the international payments provider.

A “substantial” increase in usage of the currency in the final week of August was triggered by market volatility caused by concerns about the Chinese economy and Beijing’s devaluation of the yuan, Swift said in a report.

To be sure, the yuan remains a small player on the global stage—it was used in 2.8% of global payments in August, compared with 44.8% for the dollar, 27.2% for the euro and 8.5% for the British pound.

But the Chinese currency has been gaining traction. As recently as August 2012, the yuan was ranked No. 12 on Swift’s list with just a fraction of its current share of the global payments market.

Astrid Thorsen, head of business intelligence solutions at Swift, said volatile Chinese markets spurred greater use of the Chinese currency, especially toward the end of August.


Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza