Yuan Has Not Replaced Dollar, Executive Says
Standard Chartered China's CEO says the yuan will likely remain a secondary global currency for the foreseeable future.
Updated on Sept. 30, 2026 in Financial Services
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Standard Chartered China CEO Jean Lu stated that the Chinese yuan will not replace the U.S. dollar as the primary global reserve currency. Instead, the yuan is positioned to potentially compete with the Japanese yen and British pound as a secondary international currency.
Why it matters
While China has introduced a five-year plan to expand its currency's international reach, persistent factors like capital controls and limited offshore liquidity continue to hinder widespread adoption. These structural challenges remain significant barriers to the yuan rivaling the dominance of the U.S. dollar.
As of Q1 2026, the U.S. dollar accounted for 57% of global foreign exchange reserves, compared to just 2% for the yuan. Meanwhile, settlement volumes between China and Southeast Asia reached 8.9 trillion yuan throughout 2025.
The players
Jean Lu
Jean Lu is the CEO of Standard Chartered China who addressed the future role of the Chinese yuan at a media roundtable in Singapore.
Singapore Airlines
Singapore Airlines is an international carrier that recently participated in the offshore yuan market by issuing a 1.5 billion yuan Dim Sum bond.
People's Bank of China
The People's Bank of China is the central bank of the People's Republic of China and is responsible for implementing monetary policy to increase yuan liquidity.
The details
China is actively promoting the internationalization of its currency through mechanisms like Panda and Dim Sum bond issuances, including a 1.5 billion yuan bond issued by Singapore Airlines in June 2026. The People's Bank of China has further supported this initiative by launching new repo facilities and appointing offshore clearing banks to boost liquidity.
Timeline
Thailand recorded over 2,000 factory closures during 2024.
Settlement volumes between China and Southeast Asia reached 8.9 trillion yuan in 2025.
China released its latest five-year plan to expand the yuan's international role in March 2026.
The U.S. dollar held 57% of global reserves in Q1 2026.
Singapore Airlines issued a 1.5 billion yuan Dim Sum bond in June 2026.
Market Landscape
This assessment aligns with China's 2026 five-year plan, which seeks to expand the currency's role through measured steps rather than an immediate overhaul of global systems. By focusing on regional trade and specific offshore bond markets, the strategy positions the yuan as an alternative for trade partners rather than a direct challenger to established reserve status.
For businesses operating in international markets, the increasing usage of the yuan for trade settlements may lead to more diverse options for managing cross-border transaction costs. Consumers and firms should monitor how increased liquidity in offshore markets could potentially impact regional trade financing terms.
The takeaway
While the Chinese yuan is gaining traction as a regional trade currency, it remains far from achieving the status of a primary global reserve asset. Global participants should treat the yuan as a useful secondary tool for trade settlement rather than a replacement for the U.S. dollar.
Further reading
For more on the evolving trends in international finance, visit the Financial Services section.
Source note: This article includes information reported by Fortune.
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