De-Dollarization Accelerates: Can the Renminbi Surpass the Euro as the World's Second-Largest Currency?
N.R. Finch
CIPS daily volume surged to ¥1.22 trillion, nearly doubling from February's average — oil-state adoption is turning de-dollarisation from slogan into measurable capital flow.
Where did the ¥1.22 trillion spike come from?
On April 2, China's Cross-Border Interbank Payment System (CIPS) processed ¥1.22 trillion (≈$180.3 bn) in a single day — nearly double the daily average in February.
The surge came just hours after Trump's hawkish remarks on Iran. Geopolitical tension directly boosted demand for renminbi-settled cross-border transactions.
This means → renminbi cross-border usage is no longer just a trend line — it can spike on a single geopolitical event.
Why are oil-producing states the key driver?
The core force behind the peak is oil-producing nations expanding their share of renminbi-denominated settlement — the so-called "petro-yuan" shift.
In plain terms = more oil sellers are accepting renminbi instead of dollars — the most tangible step in de-dollarisation.
The Iran situation accelerated this further: when the dollar system itself becomes a source of geopolitical risk, demand for alternatives rises naturally.
Where does the renminbi rank today?
PBOC Governor Pan Gongsheng (潘功胜) said in June 2025 that the renminbi is now the world's third-largest payment currency on a composite basis and already the second-largest trade-finance currency.
Liu Xiaochun (刘晓春), deputy dean of the China Finance Institute at Shanghai Jiao Tong University, put it bluntly: "The signs are very clear. Frankly, if Europe keeps stagnating, the euro will be overtaken soon."
This means → overtaking the euro for global No. 2 is the most realistic next milestone — not replacing the dollar.
Replace the dollar — or a multi-currency world?
The dollar still commands an outright majority of international settlement. Displacing it in the near term is not realistic.
The deeper shift is structural: global trade settlement is moving from dollar dominance toward multiple currencies used in parallel, sorted by region, political alignment, and industry.
This reflects a possible endgame that is less "who replaces whom" and more a wholesale redrawing of the currency map.
What to watch next?
Whether the renminbi can overtake the euro near-term hinges on three variables: the pace of Europe's economic recovery, how persistently oil states stick with renminbi settlement, and how far China opens its financial markets.
In plain terms = the weaker Europe is, the more committed oil states remain, and the more China opens up, the faster the renminbi climbs to No. 2.
If any one variable reverses, the timeline stretches — this is not a one-way bet.
Content is for reference only, not financial advice.