China Ditches US Dollar, Local Currency Trade Reaches Record $14B

China is increasingly moving away from the US dollar in international trade, and recent figures highlight this shift. Jiangsu province in East China saw international commerce with BRICS nations reach a record $14.4 billion. This signifies a significant trend: China Ditches US Dollar, Local Currency Trade Reaches Record $14B, showcasing a growing reliance on local currencies for trade settlements.

Many nations have opted for local currencies for mutual trade. This de-dollarization trend is gaining momentum, particularly within the BRICS bloc of nations. BRICS is comprised of Brazil, Russia, India, China, and South Africa, and the bloc has particularly pushed for de-dollarization, seeking to reduce dependence on the US dollar for international transactions.

One key example of this shift is the agreement between China and Brazil. In April, China and Brazil reached a deal to trade in their own currencies, ditching the US dollar as an intermediary. The BOC said it is helping Brazilian enterprises facilitate these transactions.

While the shift is underway, it's important to understand the context. In the first few months of 2025, settlements in local currency accounted for less than 1.0% of China’s cross-border payments, compared to approximately 83.0% in USD. This indicates that while the record $14B figure is significant, there's still a long way to go before the US dollar is completely replaced.

The move towards local currency trade represents a strategic effort by China and other nations to diversify their economies and reduce reliance on the US dollar. This has far-reaching implications for the global financial landscape, as more nations explore alternative payment systems and currency arrangements.