- BRICS nations Russia and Iran settled $214 billion in trade using the Chinese yuan in March.
- Geopolitical conflict in the Middle East is accelerating the shift away from the US dollar for global payments.
- Iran accepted both the yuan and cryptocurrencies like Bitcoin from allied nations during the Strait of Hormuz closure.
- Experts see the conflict as a catalyst for the potential rise of a “petroyuan” in energy trade.
In March 2024, the accelerating global de-dollarization movement saw a major shift as BRICS members Russia and Iran conducted a massive $214 billion cross-border settlement. This landmark transaction, settled exclusively in Chinese yuan, underscores a strategic pivot by sanctioned nations away from the US dollar. However, the military conflict in the Middle East has now become a significant catalyst for this financial realignment.
Consequently, developing nations are tightening their dollar-based payment systems. Iran notably closed the Strait of Hormuz to “unfriendly nations” in late February, while allowing passage to allies like China and Russia. These allied countries paid for access in Chinese yuan, further cementing the currency’s regional role.
Apart from the yuan, Iran also accepted cryptocurrencies such as Bitcoin from BRICS members during the crisis. “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,” he stated.
Meanwhile, Russia has largely frozen US dollar payments since early 2022. The Putin administration now conducts most trade in yuan, vigorously advancing the de-dollarization agenda with strong support from China.
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