Russia has revealed its intention to settle trade and commerce with Asia, Africa, and Latin America using the Chinese yuan. The decision comes as Russian President Vladimir Putin urges for the internationalization of the yuan, citing the currency’s important role in bilateral trade.

Putin estimates that almost two-thirds of trade between Russia and China is conducted in yuan and ruble. As a result, he considers the use of the yuan in settlements between Russia and other nations to be a reasonable step toward expanding economic links and fostering economic stability worldwide.

China’s ambition to become more active in global economic and political events is also consistent with the choice to use the yuan in trade settlements. This most recent step by Russia is expected to aid China’s efforts to increase its presence and influence in the global financial system.

Putin Calls for Yuan Internationalization as Russia Adopts Currency for Trade

Putin has maintained that the alliance between Russia and China is “not confrontational,” despite some fears about the possibility of a confrontational relationship between the two countries. Instead, he has underlined the necessity for stronger cooperation and coordination between the two nations, especially in light of rising economic and geopolitical concerns.

Russia’s choice to adopt the yuan in trade transactions with Asia, Africa, and Latin America represents a fundamental change to the global financial system. If China continues to impose its influence and position itself as a major participant in the global economy, we can anticipate other nations adopting the yuan as a viable alternative to existing currencies, following Russia’s example.