…..and, in hypothetical stress scenarios, preventing disorderly sales of US assets.” He went further and named the actual game: “Dollar dominance and reserve currency status are strengthened by constant long-term initiatives, including countering the growth of problematic, alternative payment systems.” Translation for those who do not speak Treasury, this is about killing the petroyuan in its cradle.
To see why this matters, consider the architecture Beijing has spent the past decade methodically constructing. The People’s Bank of China has established more than 40 bilateral yuan swap arrangements with foreign central banks. The Cross-Border Interbank Payment System, China’s parallel to SWIFT, has expanded continuously through 2025, connecting thousands of indirect participants and reaching well over 100 countries and regions. The mBridge cross-border central bank digital currency project, in which Saudi Arabia is a participant, provides yuan-denominated settlement rails that bypass SWIFT entirely. The Council on Foreign Relations argued in March 2026 that rising cross-border yuan payments may be weakening a key US sanctions tool, and a March 2026 House Select Committee investigation documented that China has effectively become the clearing market for sanctioned oil from Iran, Russia, and Venezuela. Iran’s 25-year cooperation agreement with Beijing routes a substantial majority of Iranian oil exports through yuan-denominated channels, often processed by smaller Chinese refineries to obscure the trade flows. Venezuela has settled the bulk of its oil exports to China outside the dollar system since 2018. The China-Russia-Iran-Venezuela-Cuba axis is not a coincidence and it is not a fringe alliance. It is a deliberately constructed parallel financial system, and Xi Jinping’s previously private 2024 instructions, since published in the Communist Party’s flagship ideological journal Qiushi, direct officials to build a strong currency widely used in international trade and foreign exchange, with a powerful central bank capable of attracting investment and influencing global pricing.