China’s Yuan Settlements Jump to $214B in March as Russia, Iran Accelerate Dollar Exit

The Rise of the Petroyuan

The global financial landscape is undergoing a tectonic shift as the conflict between the West and a growing coalition of sanctioned nations accelerates a move away from the U.S. dollar. Fueled by recent military strikes and a tightening net of sanctions, Iran and Russia have ramped up their use of the Chinese yuan and cryptocurrencies to sustain trade and fund state operations.

A recent report by Nikkei indicates the use of the yuan to pay for crude oil and other commodities has soared. Settlements on China’s Cross-border Interbank Payment System (CIPS)—Beijing’s alternative to the Western-led SWIFT network—hit about $214 billion (1.46 trillion yuan) in March. That represents a 50% increase from the previous month and triple the level seen in 2021.

This surge comes as Iran takes drastic measures in response to a U.S.-Israeli air campaign that began in February. Tehran has effectively closed the Strait of Hormuz to “unfriendly nations,” while allowing passage to ships from China, Russia and India.

To bypass traditional banking, Iran has implemented a system of security tolls for vessels transiting the chokepoint, with payments reportedly demanded in yuan or cryptocurrency.

“The Middle East conflict has acted as a catalyst,” said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered. “We are seeing the beginnings of a ‘petroyuan‘ that could eventually erode the dollar’s grip on energy trade.”

Russia, largely frozen out of the dollar-based system since its 2022 invasion of Ukraine, has similarly integrated the yuan and digital assets into its war economy. In an August 2025 interview, President Vladimir Putin noted that transactions between Russia and China are now almost entirely conducted in rubles and yuan.

A March 2026 report by Chainalysis revealed that the value of crypto assets received by sanctioned entities surged nearly 700% last year, reaching a record $154 billion. Iran’s Islamic Revolutionary Guard Corps reportedly accounted for over $3 billion in crypto transfers in the final quarter of 2025 alone, using digital wallets to pay for physical commodities and shipping logistics.

Expanding the Digital Frontier

China launched CIPS in 2015 to internationalize the yuan, and the system has grown exponentially. By the end of 2025, more than 1,700 financial institutions worldwide were connected. Beyond CIPS, Beijing is piloting the digital yuan (e-CNY) for cross-border payments with partners such as Saudi Arabia and the United Arab Emirates. These channels allow for instant settlement without the need for intermediary U.S. banks.

In Saudi Arabia, the shift is already visible: the share of oil transactions settled in yuan reached 41% in March, the same month two major Saudi state-owned banks joined the CIPS network.

Despite the rapid growth, the yuan still faces a steep climb. According to SWIFT data, the yuan held only a 3% share of global settlements in early 2026, compared to the dollar’s dominant 51%.

However, the divergence is clear. As the yuan strengthens against the dollar, other Asian currencies, including the yen and won, have weakened, burdened by the rising costs of oil priced in non-traditional currencies. Toru Nishihama, chief economist at Daiichi Life Research Institute, said he believes the trend is irreversible.

“The movement away from the dollar will continue to accelerate as these alternative networks reach critical mass,” Nishihama said.