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.