A Wall Street Journal report says the growing use of China’s yuan is creating an alternative financial system that lets U.S. rivals conduct international trade outside the heavily monitored Western banking network. For Washington, that weakens a long-standing tool of foreign policy, because it becomes harder to track money flows and enforce sanctions.
The article says the trend is especially important for Iran, even as the White House is holding talks on a new nuclear deal and promising sanctions relief and access to some frozen assets. According to the report, Tehran and Beijing have built an обход route that allows Iran to keep exporting oil and bringing in billions of dollars without going through U.S.-controlled banks. Josh Lipsky of the Atlantic Council said yuan-based systems make it easier to evade American sanctions and reduce U.S. intelligence’s visibility into financial flows.
The yuan’s share of global trade has tripled in five years to 6% in April, making it the second-most-used currency in trade finance after the dollar, ahead of the euro. Iran reportedly earned about $43 billion from oil in 2024, with most of it paid in yuan. In many cases, Chinese buyers deposit payments with an entity called Chuxin, which then transfers the money to Chinese contractors working on Iranian infrastructure projects such as airports and refineries, avoiding direct transfers.
The report also describes barter deals, including one involving the Chinese city of Ningbo trading auto parts for Iranian pistachios, and a shadow-fleet network that moves oil to China with tracking devices switched off. Other tools include China’s CIPS payment system and the mBridge blockchain project, which move digital versions of currencies without passing through U.S. banks. Beijing also allowed yuan deposits in Chinese banks to earn interest in January. Meanwhile, the U.S. has temporarily allowed Iran to sell oil and receive dollar payments as part of nuclear talks, while Iran still reportedly sells crude at an average 13% discount. The article says the shift began after the 2008 financial crisis, accelerated with CIPS in 2015, yuan-denominated oil contracts in 2018, the 25-year Iran-China strategic agreement in March 2021, and sanctions on Russia after the 2022 Ukraine war. The U.S. is responding with sanctions on Chinese refineries and banks, while China says it is not aware of specific oil trade and conducts relations under international law.
