The Chinese yuan is gaining prominence in global finance as more nations look beyond the US dollar. Its share in worldwide foreign exchange trading has climbed to 8.5 percent in 2025, compared to 7 percent in 2022 and just over 2 percent ten years earlier. This rise has placed the yuan as the fifth most traded currency, approaching the British pound. China has strengthened this position through the CIPS payment system, digital yuan initiatives, and expanded currency swap agreements. Countries like Kenya have begun using the yuan for loan settlements, while instability in the dollar due to political and trade uncertainties has pushed diversification further. However, the dollar continues to dominate global trade, and China’s rigid capital restrictions still limit the yuan’s full expansion.