Russia reportedly abandons push to replace dollar with yuan under US sanctions

Yuan rise after the sanctions

After Western sanctions cut Russia off from dollar and euro payments and barred the import of both currencies and trade in them, the Kremlin announced that the yuan would take the dollar's place. In the first years of the war the Chinese currency gained ground quickly. Its share of Russian foreign trade rose to nearly half, it became the most traded currency on Moscow's domestic currency market, and it overtook the dollar in bank deposits. Russian banks moved their lending from dollars and euros into yuan, yuan-denominated bonds grew at a double-digit pace, and the currency became one of the main assets in the Bank of Russia's reserves. As a result, the Russian economy became dependent on the yuan.

The June 2024 break

In June 2024 the United States sharply expanded the grounds for imposing secondary sanctions on financial institutions and companies doing business with Russia. Trade between Russia and China then ran into chaos. Payments in China were frozen or delayed for months, transfers were sent back, and the largest Chinese banks eventually stopped working with Russian counterparties altogether. Small provincial Chinese banks had handled secret payment transactions for a time, but they too eventually refused Russian transactions. The yuan's share of payments for Russian exports had peaked at 45.2% in May 2024, just before the expansion.

Yuan share of payments falls

Bank of Russia data from June 2026 put the yuan's share of payments for Russian exports to 'friendly' countries at 20.8%, more than half below its May 2024 peak. Another report, citing the most recent central bank figures, gives 22% for 2026, a level it describes as half the peak; the two figures are not reconciled in the sources. Bloomberg reports that Russia has effectively dropped its effort to replace the dollar with the yuan. The turn came after Chinese banks began to fear they would be hit by the secondary sanctions Washington has threatened over the war in Ukraine.

2024-0545.2%

2026-0620.8%

2024-05

45.2 %

2026-06

20.8 %

Data from the article text

Payment friction for Russian firms

With direct yuan settlement largely unavailable, Russian companies depend on intermediaries, third countries and more complex payment routes, which makes transactions slower, more costly and less predictable. Payments are still being made, but according to logistics firms working with China, no method guarantees that a given payment will succeed. Client materials from the logistics group STA SiberiaTransAsia say that paying Chinese suppliers in 2026 will not be a simple transaction. Even with a signed contract and a verified counterparty, Russian firms face payment delays, refunds and extra compliance checks. Alexander Vedyakhin, first vice-president at Sberbank, Russia's largest bank, said that although Russia and China have officially moved to settling trade in their national currencies, payments are still subject to frequent disruptions. Alexander Gabuev, director of the Eurasia Center analysis group, says regular bank payments have fallen sharply.