China's yuan settlements hit record, and the Iran conflict is looking like a catalyst
By: Sylvia Ma (South China Morning Post)
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S E E D E D C O N T E N T
April 9, 2026 -- Rising demand for yuan settlement amid Middle East tensions is driving record transaction amounts in China's cross-border payment system, analysts said, building on years of efforts to bolster financial infrastructure and expand its global network.
"The Middle East conflict may have acted as a catalyst," said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered, citing rising demand for yuan settlement, particularly in oil trade.
China's Cross-border Interbank Payment System (CIPS) recently saw its single-day transaction value reach a record high of 1.22 trillion yuan (US$178.5 billion), with nearly 42,000 transactions processed, according to the state-owned Shanghai Securities News on Thursday.
The surge follows strong momentum in March, when the system's average daily transaction value climbed to 920.45 billion yuan - the highest level in a year and a nearly 50 per cent rise from February's 619.74 billion yuan. Average daily transaction volume also rose to 35,740, up sharply from 25,930 in February.
Ding added that the recent rise has also been supported by the yuan's relative stability, China's investment in cross-border payment infrastructure, and a growing number of CIPS participants.
In the longer run, an expanding yuan-payment network will also support the [currency's] adoption. -- Xu Tianchen, Economist Intelligence Unit
The yuan has been on a steady upwards trajectory in recent months; as of the noon session on Thursday, the offshore yuan was trading at around 6.834 against the US dollar. A lower yuan exchange-rate figure indicates a stronger Chinese currency, as it takes fewer yuan to purchase one dollar.
“As the number of participants expands, so does the commercial network it covers,” Ding said. “Once the underlying infrastructure is in place, growth can become relatively pronounced when a catalyst emerges.”
Beijing has stepped up efforts to develop alternative cross-border payment systems, which are seen as critical to reducing reliance on US dollar-dominated channels amid rising bilateral tensions and growing concerns over the weaponisation of the dollar.
According to the CIPS website, the system had 1,766 participants – including both direct and indirect – as of the end of 2025, with its network spanning 190 countries and regions. By comparison, the figure stood at just 1,092 at the end of 2020.
Xu Tianchen, senior economist at the Economist Intelligence Unit, said the rise in CIPS transactions may have been linked to “an increase in China-related trade as supply chains elsewhere are disrupted”.
“In the longer run, an expanding yuan-payment network will also support the [currency’s] adoption,” he added.
China recently carried out the first major update in eight years to the business rules governing CIPS, which previously focused on yuan-denominated payments. Analysts now say Beijing appears to be moving towards building the system into a global platform that supports multicurrency settlements and other foreign payment channels.
Sylvia Ma joined the Post in 2023 as a graduate trainee and covers China's economy. She holds a master’s degree in journalism from the University of
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