A new report shows that Moscow traders are buying more Chinese Yuan (CNY) than US dollars (USD).

A report from the Russian newspaper Kommersant revealed that the Chinese yuan is trading at a higher volume than the US dollar in Moscow. Moscow is aggressively chasing a reduction of dollar trading in response to harsh US sanctions. This has been going on since the US warned the Russian government about its incursions into Ukraine.

From February 2022, the US has been increasing its sanctions against Russian financial institutions, and Russia has fired back with sanctions and financial tactics of its own. The Russian government advised its people to hurt the US dollar by trading for its competitors instead, pushing interest in the Chinese yuan in particular.

Moscow is going through a de-dollarization process and placing its focus on improving relations with Beijing. The two countries depend on each other for military supplies, vehicles, smartphones, energy sources, and more.

A Change in Trade

How significant is yuan trading in Moscow? It accounts for more than 40% of all currency that is being traded across the Moscow Exchange. In 2023, the number of yuan traded increased by 200%, which amounts to about $391.5 billion USD, or 34.14 trillion rubles. This data come from the Moscoow Exchange and was included in the Kommersant report.

How much traction is the dollar getting on the exchange? It accounts for 39.5% compared to a 63% share back in early 2022.At that time, the yuan was making up about 13% of Moscow Exchange’s foreign currency trading. With the dollar still making up a significant portion of the trading, that shows it still holds a lot of sway in Moscow’s markets, and there is no denying the power of the dollar even during wartime sanctions.

Mocow has been actively working against what it considers to be unfriendly currencies, which include the US dollar, the Euro and currencies of other nations that have enacted sanctions against it. Those sanctions will likely continue so long as Russian keeps putting pressure on Ukraine and making inroads on its borders.

Both Russian and China have nearly dropped the US dollar in bilateral trades, and their ultimate goal in this area is to dethrone the dollar as the chief global currency.