Core Insights - The recent SWIFT data indicates that the Chinese yuan has risen to the fifth position in global payment currency rankings, with a share of 3.17%, reflecting a 15.53% increase in payment amounts compared to the previous month [1][2] - The fluctuations in SWIFT's data have led to public confusion regarding the actual status of the yuan in international payments, highlighting the need for clarity in statistical measures [1][2] SWIFT's Role and Limitations - SWIFT is a major financial messaging service provider, connecting over 11,000 financial institutions across more than 200 countries, and its data is often used to gauge currency internationalization [2] - However, SWIFT's statistics are limited to its own messaging system and do not encompass all international currency usage scenarios, leading to an underestimation of the yuan's actual cross-border payment share [2][3] CIPS and Cross-Border Payments - The Cross-Border Interbank Payment System (CIPS) plays a crucial role in facilitating cross-border yuan transactions, processing 8.22 million transactions worth 175 trillion yuan in 2024, marking a year-on-year growth of 24% and 43% respectively [2][3] - CIPS supports both fund flows and information flows, enhancing the yuan's cross-border payment capabilities [2] Comparative Currency Statistics - Different currencies have asymmetric statistical coverage; for instance, the euro and pound often utilize SWIFT for domestic payments, while yuan domestic payments can be processed through independent systems, leading to data discrepancies [3] - A unified statistical approach could better reflect the yuan's position as the third-largest global payment currency [3] Comprehensive Data on Yuan Internationalization - The People's Bank of China provides comprehensive data that indicates the yuan's increasing international usage, with cross-border payments reaching 34.9 trillion yuan in the first half of 2025, a 14% increase year-on-year [4] - The Bank for International Settlements (BIS) reported that the yuan's share in foreign exchange trading rose to 8.5% in April 2025, up from 7% in 2022, solidifying its fifth-place ranking [5] Investment and Reserve Indicators - As of the first quarter of 2025, the yuan's reserve currency status has improved, with a reported holding of 246.3 billion USD, representing 2.12% of global reserves, an increase since its inclusion in the SDR [6] - The demand for yuan-denominated assets is growing, with foreign holdings of yuan-denominated stocks and bonds reaching 10.4 trillion yuan by mid-2025, a 5.2% increase [5] Yuan Internationalization Indices - The Renminbi Internationalization Index (RII) and the Renminbi Global Index (RGI) are key metrics for assessing the yuan's international usage, with the RII indicating a value of 5.68, placing it third among major currencies [7] - The RGI has shown consistent growth, reaching 4666 points by July 2025, reflecting the expansion of offshore yuan business and its internationalization [7]