The Iran war has created what analysts describe as a “golden window” for the internationalisation of the Chinese renminbi, with increased adoption of Beijing’s cross-border financial infrastructure and growing speculation over its role in global oil trade, according to reporting by the Financial Times. The shift is seen as part of a broader realignment in global payments driven by sanctions, energy market disruptions, and evolving trade routes.
Central to this development is China’s cross-border interbank payment system (Cips), which has recorded a sharp rise in activity since the conflict escalated. Data cited by the Financial Times shows that average daily transaction volumes reached record levels, with spikes in settlement activity suggesting increased reliance on renminbi-based clearing for international trade flows.
Cips, introduced in 2015, was designed as an alternative to Western-dominated financial messaging and settlement systems, allowing cross-border transactions to be conducted in renminbi. While it does not publicly disclose detailed breakdowns of traded commodities, analysts believe a growing share of energy transactions—particularly oil—may now be settling in China’s currency as geopolitical restrictions reshape payment options.
The trend has been amplified by sanctions affecting major oil exporters such as Russia and Iran, which have increasingly turned to non-dollar settlement mechanisms. In some cases, buyers and intermediaries have reportedly had limited alternatives, encouraging the use of renminbi in oil transactions linked to Asia and other markets.
Analysts quoted by the Financial Times, including economists at Citi, described the moment as a “golden window” for the expansion of renminbi usage, driven by geopolitical fragmentation and shifts in global energy trade. Some experts argue that China’s position as the world’s largest oil importer gives it structural leverage in negotiations over currency use in trade settlements.
While estimates vary, researchers suggest the renminbi’s share of global oil transactions remains in the single digits, far below the dominance of the US dollar, which continues to account for roughly 80 per cent of global oil trade settlement. Nevertheless, incremental growth in renminbi usage has fueled speculation about the emergence of a “petroyuan” system as an alternative to the long-standing petrodollar structure.
The Financial Times report notes that despite rising usage, significant structural barriers remain to full internationalisation of the Chinese currency. These include limited global access to Chinese financial derivatives markets and continued capital controls, which restrict the free flow of renminbi outside China’s domestic financial system.
Market analysts also point to emerging mechanisms that could support broader renminbi circulation, including gold settlement channels via Chinese exchanges. The Shanghai Gold Exchange has developed infrastructure allowing foreign holders of renminbi to convert holdings into gold, providing an alternative reserve asset outside the dollar-based system.
The growing use of China’s payment infrastructure, particularly Cips, is also being viewed by experts as a “proof of concept” moment, demonstrating that alternative settlement networks can function at scale under certain geopolitical conditions. However, analysts cited by the Financial Times emphasize that the system still processes a relatively small share of global transactions compared with Western financial architecture.
Overall, the developments suggest a gradual but notable shift in global trade finance dynamics, with the Iran war acting as a catalyst for experimentation with alternative currencies and payment systems. While the renminbi’s rise remains incremental, observers say the trend reflects Beijing’s long-term strategy to expand its currency’s international role without fully abandoning existing financial controls.
