Dollar, goodbye: Kazakhstan started making cross-border settlements with China in yuan

Kazakhstan's cross-border e-commerce platform Alem Market has carried out the first international transaction using Chinese yuan. The calculations were carried out through the CIPS system (Cross-Border Interbank Payment System) — international interbank system for transfers in yuan. This is reported by the telegram channel "Eurasian Briefing".

Regional operators such as Alem Market can reduce transaction costs and currency risks through the use of CIPS. This became possible due to the integration of Kazakhstan into the yuan-clearing system, which provides specialized financial infrastructure.

The yuan-clearing system provides an opportunity to make direct payments between countries in the national currency of China, avoiding the use of the dollar. In 2022, a formal agreement on direct payments was concluded between the National Bank of Kazakhstan and the People's Bank of China. Within the framework of this agreement, branches of the Industrial and Commercial Bank of China, as well as the Chinese Construction Bank, were opened in Almaty and Astana. These Chinese financial institutions have received the status of clearing centers and have become key nodes for converting Kazakhstani tenge into Chinese yuan without intermediate currencies and their cross-rates, as well as for conducting interbank transactions.

Kazakhstan became the first country in Central Asia to have direct access to the CIPS system. Now Kazakhstani companies and banks can make settlements with China faster and more economically, without the need to use the dollar as an intermediate currency.

Over the past three years, the Kazakh authorities have been significantly increasing the use of the Chinese yuan in international trade. According to the results of the first half of 2024, the share of the yuan in Kazakhstan's foreign trade operations reached 12%, which is more than three times higher than in 2022. The Ministry of Trade of Kazakhstan predicts that by the end of 2025 this share may increase to 20%.

According to the General Administration of Customs of China, Kazakhstan in 2024 became one of the leading trading partners of China, occupying a 46% share in the total volume of regional trade. A new record for rail freight traffic was set between the two countries: in 2024, the volume of transported goods exceeded 32 million tons, and Kazakhstan's exports increased by 1 million tons.