China’s Cross-Border Interbank Payment System (CIPS) has shattered all-time records in March 2026 as the petrodollar comes under fresh pressure. On a single day, the SWIFT challenger processed a staggering 1.22 trillion yuan, roughly 178.5 billion US dollars, across nearly 42,000 transactions.
This explosive surge comes as rising yuan demand in oil trade, fueled by the Iran conflict, accelerates the shift away from traditional dollar dominance.
In March 2026 alone, the system’s average daily transaction value climbed to 920.45 billion yuan, the highest level in a year and a nearly 50 percent rise from February’s 619.74 billion yuan. Average daily transaction volume also rose to 35,740, up sharply from 25,930 in February.
Iran Oil Crisis Ignites CIPS Record Surge: Geopolitics Fuels Explosive Yuan Demand in 2026
Rising demand for yuan settlement, particularly in oil trade, is driving record transaction amounts. Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered, when citing rising demand for yuan settlement, said “The Middle East conflict may have acted as a catalyst.”
Analysis of CIPS data shows that monthly averages for daily transaction volume remained within an $85–105 billion range over the past year. In mid-to-late March, however, daily observations rose to over $130 billion. The increase in volume does not by itself show that Iranian oil payments are moving through CIPS, as the system handles tens of thousands of transactions a day that reflect a wide range of uses.
Ming Ming, chief economist at CITIC Securities, adds the structural side: the renminbi’s relative stability amid rising global tensions makes it an appealing settlement currency, which feeds demand for CIPS directly.
The Petrodollar Under Siege: How Iran Conflict and Hormuz Tolls Are Boosting the Petroyuan
For over five decades, the petrodollar system has been a cornerstone of US financial dominance. Established in the 1970s after the end of the gold standard, it rests on a simple but powerful arrangement: major oil producers, starting with Saudi Arabia, price and sell crude in US dollars in exchange for American military protection and access to US markets.
This forced oil-importing nations worldwide to hold dollars, creating constant global demand for the currency and enabling petrodollar recycling into US Treasuries.
That long-standing architecture is now facing real strain. The ongoing Middle East conflict has spotlighted Iran’s efforts to bypass dollar-based trade. Tehran is accepting yuan for oil shipments and even considering yuan-denominated tolls for tankers passing through the Strait of Hormuz, a critical chokepoint carrying around one-fifth of global oil supply. China, already the top buyer of Iranian crude (often settled in yuan to evade sanctions), stands to benefit directly.
While the surge in CIPS volumes cannot be attributed solely to Iranian oil flows, the timing aligns with heightened demand for non-dollar settlement options.
Deutsche Bank strategists have stated that the conflict could mark the beginnings of the petroyuan, potentially eroding the petrodollar’s grip over time.
“The huge strategic importance of the Middle East to the dollar’s role as the world’s reserve currency should not be underestimated. The current conflict could test the foundations of the petrodollar regime,” said Deutsche Bank researcher Mallika Sachdeva.
A full replacement still remains distant. The dollar still dominates global oil pricing and SWIFT messaging. Yet incremental shifts in energy trade are chipping away at one of the dollar’s most enduring pillars.
CIPS vs SWIFT 2026: China’s Payment Challenger Hits Massive Scale But Still Trails the Giant
CIPS has real scale now. The system provides cross-border services to over 5,000 banking institutions across 190 countries and regions, and by the end of 2025 had 193 direct and 1,573 indirect participants, up from just 19 and 176 at its launch a decade ago.
But SWIFT still dwarfs it. SWIFT connects over 11,500 institutions in more than 235 countries and territories, processing payments in virtually every major currency. Its RMB tracker shows the yuan accounted for just 3 percent of global SWIFT payment currency share in mid-2025, versus 48 percent for the US dollar and 24 percent for the euro.
There is also the dependency issue. CIPS relies on SWIFT’s messaging service for over 80 percent of its transactions, making the two systems more complementary than adversarial, at least for now.
Beijing recently undertook the first major update to CIPS business rules in eight years, effective February 2026, moving toward a global platform capable of handling multi-currency settlements and other foreign payment channels. That shift matters. CIPS is no longer purely a yuan-settlement rail.
BRICS De-Dollarisation Accelerates: CIPS Builds the Infrastructure to Chip Away at Dollar Dominance
When Sibos was held in Beijing in October 2024, BRICS nations simultaneously met in Russia to discuss the BRICS Cross-Border Payment System, a platform aimed at facilitating trade in local currencies. The timing was deliberate. Beijing has been methodical about building the payment infrastructure needed to reduce dollar dependency, brick by brick.
In 2025, CIPS direct participants for the first time included foreign-invested institutions in Africa, the Middle East, Central Asia, and the Singapore offshore RMB center. Florence Tan at DBS China put it plainly: enterprises now have a commercial reason to use the yuan to optimise treasury management, cut foreign exchange costs, and reduce exposure to dollar-linked volatility.
It is important to note that these systems still do not challenge the dollar’s status as the reserve currency. However, they do undermine a key pillar of dollar dominance: the power of financial sanctions.
In 2026, CIPS transactions are expected to expand steadily, with business types potentially extending from traditional trade settlement into financial market settlement, liquidity management, and integrated cash management, according to Song Ke of Renmin University’s Shenzhen Advanced Institute of Finance.
That’s a wider mandate than CIPS was originally built for. Whether the infrastructure, and the political will behind it, can sustain that expansion will determine just how serious a rival it becomes. We’ve tracked the renminbi’s trajectory through 2024 and into 2025. The 2026 data makes those questions considerably more urgent.
Author: Ayanfe Fakunle
See Also:
16 Currencies That Crushed the U.S. Dollar in 2025 | Disruption Banking
The 7 Biggest Capital Markets Disruptors of 2026 (So Far) | Disruption Banking
