Yuan is second major currency in circulation in global financial system

By Alimat Aliyeva

The Chinese currency, the yuan, has overtaken the euro and become the second largest currency in the world, Azernews reports.

According to the Society of Global Interbank Financial Telecommunications (SWIFT), the market share of the yuan reached 5.99 percent in June from 5.08 percent in May. The euro's market share was 5.92 percent.

This is not the first time that the yuan has surpassed the euro in financial transactions. SWIFT data shows that the last time this happened was in November 2023.

The US dollar still holds the largest market share in global currency circulation. Its share is more than 80 percent. When calculating payments in world trade, it was found that the yuan is currently the fourth most common currency. The Chinese currency has been holding this position for the eighth month.

SWIFT reports that the most commonly used currencies in global payments today are the US dollar, euro, pound sterling, yuan and yen. The market share of the US dollar is almost 60 percent.

Over the past decade, China has actively internationalized its currency, seeking to create a financial infrastructure for cross-border payments using this currency. For example, the country has established payment banks in yuan in foreign markets, and is also expanding the system of cross-border interbank payments (CIPS).

Russia and Brazil have also increased the use of the yuan in recent years amid a shortage of US dollars. Last year, China signed a currency exchange agreement with Argentina.