The RMB’s Next Phase:
Gold, Green Finance, and What It Means for Cross-Border Payments

For decades, the US dollar has been the undisputed king of global trade and finance. But China is quietly—and not so quietly—building an alternative pathway for its currency, the renminbi (RMB). Unlike the traditional reserve-currency playbook that demands full capital account convertibility, China is pursuing a distinctly unorthodox strategy: accumulating gold at a record pace, leveraging its dominance in green technology to export RMB-denominated climate finance, and steadily increasing the use of RMB in trade settlement. By September 2025, the RMB’s share of China’s trade settlement exceeded 40%, up from just 20% in 2021. For international businesses that trade with or invest in China, these developments are not academic—they have real implications for how you get paid, what currency you price in, and how you manage risk. This guide explains what’s happening and what you need to know.

1. The RMB’s Unconventional Path

The conventional wisdom holds that for a currency to become a major international reserve currency, it must be fully convertible—meaning anyone can freely buy, sell, and exchange it without restrictions. The US dollar, the euro, the yen, and the pound all follow this model. China, however, is taking a different route.

As one major European financial institution observed in its October 2025 report, “China seems to be pursuing the unorthodox approach of wanting to become a reserve currency provider, without full capital account convertibility.” Instead of opening its capital account completely, China is building confidence in the RMB through three complementary pillars:

• Gold accumulation—providing a tangible store of value that backs the currency.
• Green finance—using its leadership in clean technology to export RMB-denominated climate finance.
• Trade settlement—leveraging its position as the world’s largest trading nation to drive RMB usage in commerce.

2. The Gold Strategy: A De Facto Gold-Associated RMB

Since 2023, the People’s Bank of China (PBOC) has been on a gold-buying spree. The central bank purchased 225 tons of gold in 2023, 44 tons in 2024, and continued accumulating through 2025. By October 2025, China’s official gold reserves stood at 2,298.5 tons—making it one of the largest gold holders in the world, second only to the United States.

But the official figures may understate the true scale. Analysts suspect that China’s actual gold holdings exceed the official numbers, and a Chinese policy expert involved in internal discussions told Reuters that China’s gold reserves should reach at least 5,000 tons—more than double current holdings.

Why gold? The strategy serves three purposes:

• De-dollarization: By accumulating gold, China reduces its reliance on US dollar reserves. The freezing of USD 300 billion in Russian reserves in 2022 sent a clear signal to Beijing: dollar-denominated assets are not immune to geopolitical risk.
• Confidence-building: For countries hesitant to hold large RMB positions due to capital controls, gold serves as a “bridge asset”—a tangible store of value that reduces dollar dependence without requiring full RMB convertibility.
• Pricing power: The Shanghai Gold Exchange (SGE) has become the world’s largest physical gold trading hub, processing 54,000 tons in 2023—about 75% of global spot turnover. The RMB-denominated “Shanghai Gold” benchmark gives China pricing power in a globally recognized hard asset.

3. Green Finance as the Spearhead

China has strategically positioned green finance as a distinctive pathway for RMB internationalization, capitalizing on its status as the world’s largest manufacturer of clean technology and one of the largest green bond issuers globally.

In 2024, China issued USD 69 billion in aligned green bonds, making it the third-largest source globally, after the United States (USD 85 billion) and Germany (USD 73 billion). In 2025, labeled green bond issuance in China reached approximately RMB 1.08 trillion, with “green-oriented” bonds totaling about RMB 1.92 trillion.

The Belt and Road Initiative (BRI) has become a critical vehicle for exporting RMB-denominated climate finance. In June 2024, the Bank of China issued the first USD 940 million sustainability bonds to finance both green and social projects exclusively for BRI countries, distributed in both USD and RMB. These bonds funded projects from EV battery manufacturing in Hungary to wind power in Uzbekistan and sustainable fisheries in Chile.

China’s approach leverages its technological and cost advantages in clean technology to create what some call “climate capital diplomacy.” RMB-denominated green bonds offer BRI countries—typically with low credit ratings requiring comparatively higher interest rates—access to cheaper financing. The Bank of China’s sustainability bond carried just 2.82% interest.

4. Trade Settlement: The 40% Milestone

The most immediate development for international businesses is the dramatic increase in RMB use for trade settlement. In September 2025, the share of Chinese trade settled in RMB exceeded 40%, up from just 20% in 2021.

This is not accidental. In May 2025, the People’s Bank of China raised the floor ratio for RMB-denominated trade transactions from 25% to 40% as part of its Macro Prudential Assessment, effectively requiring major banks to increase the share of yuan in cross-border trade.

In the first half of 2025, banks in China completed RMB 35 trillion in cross-border RMB payments and receipts on behalf of their clients, up 14% year-on-year. RMB has become China’s largest settlement currency for external payments, the world’s second-largest trade financing currency, and the third-largest payment currency globally.

However, there is an important nuance. As an IMF working paper noted in September 2025, even though RMB invoicing has expanded beyond Asia into Europe and Latin America, only 6.5% of Chinese exports are invoiced in RMB. This highlights a gap between settlement (the currency used for payment) and invoicing (the currency in which prices are set). The latter matters more for economic influence because it determines how exchange rate movements affect trade flows. The discrepancy suggests that many transactions may be priced in USD for stability but paid in RMB due to Chinese policy incentives or financing arrangements—meaning USD exchange rates, not CNY rates, still drive the economics of much of China’s trade.

5. What This Means for Your Cross-Border Payments

For international businesses that trade with or invest in China, these developments have practical implications. Here is what you need to consider.

Currency Choice in Contracts

More Chinese exporters are requesting RMB settlement. This is not just a preference—it is increasingly a requirement, driven by PBOC policy and the desire to reduce currency risk. If you are negotiating a contract with a Chinese supplier or customer, be prepared to discuss whether the transaction will be denominated in RMB, USD, or another currency.

Practical considerations:

• Pricing in RMB may give you access to better terms, as your Chinese counterpart can avoid currency conversion costs.
• Pricing in USD may still be the norm for many industries, but you should expect pushback from Chinese parties who are under pressure to increase RMB usage.
• In some commodity sectors—particularly energy and metals—RMB settlement options are increasingly common, with the ability to convert RMB receipts into gold via the Shanghai Gold Exchange.

Exchange Rate Risk Management

The RMB is not freely floating—the PBOC maintains a managed float with a daily fixing rate. This means exchange rate movements are less volatile than freely floating currencies, but also less predictable in the short term.

• Hedging: If you are entering into RMB-denominated contracts, consider hedging your currency exposure through forward contracts or options.
• Natural hedges: If you have both RMB revenues and RMB costs, your exposure is naturally hedged.
• Monitoring: Keep an eye on the PBOC’s daily fixing rate—it signals the central bank’s policy intentions.

Payment Infrastructure

China’s Cross-Border Interbank Payment System (CIPS) is expanding rapidly. In June 2025, CIPS signed cooperation agreements with six foreign institutions, including Standard Bank, the African Export-Import Bank, First Abu Dhabi Bank, and United Overseas Bank. This marks the first time CIPS has successfully connected to core banks in Africa, the Middle East, Central Asia, and Singapore’s offshore RMB market.

• Faster settlements: CIPS can process payments more quickly than traditional correspondent banking routes.
• Lower costs: Direct CIPS participation can reduce transaction fees.
• Geopolitical resilience: CIPS provides an alternative to SWIFT—an increasingly relevant consideration given geopolitical tensions.

6. Due Diligence: Verifying Your Chinese Counterparty

As RMB usage grows, so does the importance of verifying the legitimacy and compliance status of your Chinese counterparties. Here is a practical checklist.

Step 1: Obtain the Official Enterprise Credit Report

Start with the Official Enterprise Credit Report from China’s National Enterprise Credit Information Publicity System (NECIPS). This government-issued document provides the foundational facts about any Chinese company.

Key things to check:

• Legal status: Is the company actively operating (status “存续”) or has it been cancelled or revoked?
• Business scope: Does the company’s registered business include the activities it claims to be engaged in?
• Registered capital: Is it consistent with the scale of operations?
• Shareholders and legal representative: Who really owns and controls the business?
• Administrative penalties: Any history of regulatory violations?

Step 2: Verify Cross-Border Qualifications

Not all Chinese companies are authorized to engage in cross-border trade or receive foreign currency payments. Check:

• Import/Export license: Companies engaged in international trade must have this license.
• Foreign exchange registration: Companies that receive or make payments in foreign currency must register with the State Administration of Foreign Exchange (SAFE).
• CIPS participation: Is the company or its bank a participant in CIPS? This can speed up payments and reduce costs.

Step 3: Check Trade Compliance Records

Verify that the company has a clean record of compliance with trade regulations:

• Customs compliance: Has the company been penalized for customs violations?
• Anti-dumping or countervailing duty investigations: Has the company been subject to trade remedy measures?
• Export control compliance: Does the company handle controlled items (rare earths, dual-use technologies, etc.)? If so, does it hold the necessary export licenses?

Step 4: Assess Financial Health

Especially important if you are extending credit or entering into a long-term contract:

• Annual reports: Check financial statements filed with NECIPS.
• Tax compliance: Has the company been penalized for tax violations?
• Litigation history: Any contract disputes, debt recovery cases, or bankruptcy proceedings?

For deeper financial analysis, consider specialized Financial and Tax Reports that access non-public data—including invoice records and tax compliance information.

Step 5: Investigate Key Personnel

Using an Executive Risk Report, you can uncover:

• Cross-shareholdings that could create conflicts of interest.
• History of serving on boards of companies that have defaulted or gone bankrupt.
• Personal legal risks that could affect their ability to manage the business.

China’s RMB strategy is evolving rapidly—and it has real consequences for international businesses. The gold accumulation, green finance initiatives, and rising trade settlement share are not abstract policy moves; they are changing the practical realities of cross-border payments. Whether you are negotiating a contract, managing currency risk, or choosing a payment channel, understanding these dynamics is essential.

At ChinaBizInsight, we help international businesses verify Chinese companies across all sectors. From Official Enterprise Credit Reports and Professional Due Diligence Reports to Financial & Tax Reports and Executive Risk Reports, we give you the facts you need to make confident cross-border decisions.