China’s new payment system bypasses SWIFT, covering 38% of global trade

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China is making a calculated move that could transform the global financial landscape. The People’s Bank of China (PBoC) has rolled out a new payment system, bypassing the global SWIFT network, and it’s a clear declaration of economic war. This isn’t just about creating an alternative. It’s about reshaping the entire flow of global trade and diminishing the grip the U.S. dollar has on the world economy.

The new payment system, integrated with China’s Cross-Border Interbank Payment System (CIPS), allows for cross-border transactions using not just the digital yuan but also other national currencies. This is a direct counterattack against the U.S. dollar’s dominance in global trade. By sidestepping SWIFT, China is setting the stage for a new economic order where currencies like the yuan could rise in influence, undermining the U.S.’s ability to weaponize the dollar as a geopolitical tool.

With this system now covering 38% of global trade, China has already secured key participation from BRICS nations—Brazil, Russia, India, China, and South Africa—and other countries from the Global South. This is a tectonic shift in the balance of economic power. As these nations build out their own trade and financial systems, we are seeing the seeds of a new financial order. The shift away from SWIFT could open the door to other regional trade agreements, decoupling the world from the West’s financial framework.

The shift is not just ideological; it’s technological. China is leveraging blockchain technology and Central Bank Digital Currencies (CBDCs) to provide greater security and efficiency in cross-border payments. This technological advancement is not a side note. It’s what gives China’s system the potential to outpace Western systems, which are still bogged down by inefficiencies and legacy systems.

Why does this matter? The U.S. dollar has been weaponized for years, used to impose sanctions and leverage economic pressure on adversaries. Now, countries looking to avoid this fate can simply bypass the dollar entirely, opting for more stable or politically neutral alternatives. This is a major blow to U.S. influence in the global financial system. The question is no longer whether the U.S. will remain the world’s economic hegemon, but how quickly that dominance will erode.

There’s another angle to consider: as China’s payment system gains ground, it will accelerate the fragmentation of the global financial system. If the world’s largest economies begin to rely on national currencies instead of the dollar, we could see the emergence of regional trade blocs with competing systems.

Source Links:
https://www.foreignaffairs.com/china/economics-china-international-system-tariffs-michael-froman

https://www.moneymetals.com/news/2025/03/29/brics-nations-pushing-forward-with-alternative-global-payment-system-003947

https://www.crypto-news-flash.com/brics-plans-cross-border-payment-system-is-xrp-the-missing-piece/

https://government.economictimes.indiatimes.com/blog/end-of-dollar-era-chinas-digital-yuan-is-reshaping-global-trade-causing-financial-power-shift

https://www.thecoverage.my/6574/159-out-of-195-countries-join-to-launch-brics-pay

https://asiasociety.org/policy-institute/petrodollar-digital-yuan