China's RMB settlement push through CIPS and Belt & Road is quietly accelerating

China's long term strategy for increasing the international use of the yuan is showing up through two connected channels. The Cross-Border Interbank Payment System (CIPS) and trade settlement frameworks linked to the Belt & Road Initiative.

CIPS, launched by the People’s Bank of China in 2015, functions as a dedicated clearing and settlement system for RMB-denominated cross-border transactions. It is often described as a parallel infrastructure to SWIFT, designed to reduce reliance on dollar-based payment rails while improving RMB settlement efficiency for global trade flows.

In parallel, Belt and Road-linked financing and trade agreements have gradually expanded the use of RMB in cross-border settlements. Data from the People’s Bank of China shows RMB settlements with Belt and Road partner countries reaching over 5.4 trillion yuan in 2021, with increasing adoption in both trade and investment flows.

More recent reporting tells this trend is not static. China has been actively using policy banks and trade agreements to expand RMB-denominated lending and settlement in cross-border trade, particularly across emerging markets in Asia, the Middle East, and [Latin America](https://www.investing.com/news/forex-news/china-ramps-up-yuan-internationalisation-under-belt-and-road-initiative-3202692).

The implication is not that the yuan is replacing the dollar globally, but that settlement currency fragmentation is gradually increasing in specific trade corridors. Energy, commodities, and infrastructure-linked trade appear to be the most sensitive channels where RMB usage is expanding first.

From a market structure perspective, this creates a gradual diversification of currency settlement layers rather than an immediate shift in reserve currency dominance.

Curious how others here are thinking about this trend.