China’s March policy package will lock in a five-year push to pair industrial policy with “payment sovereignty,” scaling RMB rails like CIPS, mBridge, and BRICS Pay. The yuan has already surpassed the dollar in China’s own cross-border transactions in recent months, and its share of trade settlement across Asia, the Persian Gulf, and parts of Africa is growing rapidly.
Beijing has signalled where policy is heading: the government has drafted the 2026–2030 Five-Year Plan and will table it for formal approval at the March parliamentary session. The themes previewed—“high-quality growth,” tech self-reliance, security, and distribution—are not new, but the sequencing matters. Expect heavier state backing for advanced manufacturing and digital infrastructure (including payments), while using targeted reforms to coax private investment back in. The timing is deliberate: it lands as China’s currency and payment plumbing are gaining traction abroad.
On the rails: a parallel payments stack is quietly moving from pilots to production. Three layers are worth watching.
First, CIPS. China’s Cross-Border Interbank Payment System continues to scale: ¥175.5 trillion (≈$24.5 trn) cleared in 2024, up 43% y/y, with transactions more than tripling since 2020. This is not a SWIFT clone; it is a clearing and settlement layer that can interoperate with SWIFT but also route around it if needed.
Second, multi-CBDC. The BIS-led mBridge platform—co-developed with the PBOC, HKMA, UAE and Thailand—hit minimum viable product status and completed pilots for instant, atomic cross-border settlement in central-bank money. That gives large-value trade a credible route that’s neither correspondent banking nor purely private crypto.
Third, BRICS rails. The BRICS Pay messaging initiative (a decentralized DCMS) is advancing toward open-source, node-based interop across national schemes—think RuPay/UPI, Mir, UnionPay—designed to lower fees and avoid single points of control. South Africa has said it’s not meant to “replace SWIFT,” but it does reduce dollar-denominated dependency at the margin.
Policy is nudging usage. The PBOC has expanded swap lines, pushed QR acceptance networks, and encouraged SOEs to prioritise RMB settlement. In March 2025 China’s cross-border RMB usage hit a new record, and—echoing a milestone first seen in March 2023—the yuan again accounted for the majority of China’s international transactions that month. In short: while the RMB is far from displacing the dollar globally, it is already the top currency for China’s own external flows.
So where does this leave the RMB vs USD debate? Two truths can coexist:
1. The dollar’s moat is still wide. The BIS Triennial Survey shows the USD on one side of ~89% of all FX trades; IMF data still puts the dollar above 56% of global reserves. That liquidity, legal depth, and network effect will not evaporate.
2. The RMB’s beachhead is real and expanding. The yuan has climbed to 8.5% of global FX turnover (No. 5 globally), more swap lines are live, and offshore issuance plus clearing banks keep growing. The RMB’s near-term ceiling is credibility (convertibility, policy transparency), not plumbing.
What changes over the next five years? If March’s policy package delivers on digital infrastructure and payment connectivity—and mBridge/BRICS rails keep moving into commercial use—the RMB’s share of invoicing and settlement in Asia, the Gulf and parts of Africa should rise further, especially for commodities priced under long-term offtake. The U.S. can and will slow this through tariffs, export controls, and secondary-sanctions pressure, but those tools also incentivise counterparties to pre-build non-USD routes.
Signals to watch, practically:
• PBOC guidance on convertibility windows and macro-prudential ratios for cross-border RMB financing (recent tweaks suggest more flexibility while ring-fencing volatility).
• mBridge moving from MVP pilots to limited-production corridors (e.g., oil-settlement trials or customs-linked trade finance).
• Uptake of BRICS Pay nodes by non-BRICS partners (ASEAN, Africa) and whether national tax/customs systems integrate directly—real economy stickiness beats headlines.
NASIR KAZEROUN
BEICS FEDERATION