China’s yuan trade network sidesteps sanctions

China is expanding a yuan trade network to help Iran and Russia move commerce around Western sanctions. The article says that by early 2024, over 90% of China–Russia bilateral trade was settled in rubles or yuan, up sharply from a more dollar-dependent setup just a few years earlier. Total trade reached about $245B in 2024, roughly double 2020 levels. At the core is China’s Cross-Border Interbank Payment System (CIPS). Daily CIPS transactions have doubled since the start of the Russia–Ukraine war, indicating the yuan trade network is absorbing trade flows that previously cleared via dollar channels. On Iran, China now takes around 80–90% of Iran’s oil exports, with payments increasingly routed in yuan rather than dollars. The flow is described as close-loop: Iranian oil payments are matched against purchases of Chinese goods, using smaller Chinese banks to reduce exposure to US and secondary sanctions. Crypto enters as a limited bridge. As of March 2025, some Russian oil firms reportedly used BTC, ETH and USDT to convert yuan or rupee payments into rubles. The article stresses this is still a small fraction of overall volumes, with CIPS remaining the main infrastructure. Washington response: between 2025 and 2026, US sanctions reportedly targeted Iranian exchange houses processing billions in oil-related transactions and also expanded to Chinese-linked entities. Despite added friction, the trend toward de-dollarization and the operational scale of CIPS continue, making the yuan trade network harder to unwind. For traders, the direct market impact is likely modest, but the narrative supports the idea of stablecoin and “bridge currency” usage in sanction-bypassing trade rails.