The yuan has now firmly placed itself among the world’s top five most popular currencies for cross-border payments, securing the fourth spot for the first time in six years.
When the Society for Worldwide Interbank Financial Telecommunications (SWIFT) started tracking cross-border payment messages in 2010, the yuan ranked only 35th.
The Chinese currency’s transaction activity recently surged to its second-highest level on record, Reuters reported citing SWIFT. The yuan accounted for roughly 2.7% of global payments in December 2021.
Against the US dollar, the yuan posted its second straight year of gains in 2021. It also became last year’s best performing emerging market currency, rallying on surging exports, a growing trade surplus, and robust capital inflows into Chinese assets. Data shows global holdings of Chinese government bonds also hit a record high last month.
Meanwhile, the top spot on the list of the globe’s most popular currencies is firmly held by the US dollar with 41% of global payments. The euro occupies second place, while the British pound resides in third, having kept this spot since 2011. The Japanese yen has dropped out of the top five.
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