From April to June, the yuan surpassed the US dollar in the race to be the most-used currency in China’s cross-border trade transactions, according to a new report from Nikkei this week which cited Chinese State Administration of Foreign Exchange statistical data.

The outlet said that its analysis indicated that the increased use of the renminbi was driven mainly by increases in trade with Russia and the opening up of the capital market,

According to the statistics, last quarter the yuan was used in 49% of China’s cross-border transactions last quarter, beating out the dollar for the first time. International payments denominated in yuan rose 11% on the year to $1.51 trillion, as dollar payments fell 14% to $1.4 trillion.

The data also demonstrated that in 2022, cross-border settlements in yuan added up to 42.1 trillion yuan ($5.85 trillion). Capital transactions were responsible for more than $4 trillion or roughly 75% of that, with the remainder made up of current-account transactions, such as trade.

Although comparatively, the share of the yuan in global settlements is still low, it has been increasing its share of transactions for the past several years, as Beijing has sought to promote the use of its currency. In 2009, the government in Beijing first allowed the settlement of trade payments in yuan, which included settlements for freight, services, and current account transfers, as well as capital transaction settlements.

One factor which has supercharged Beijing’s move away from the dollar in cross-border trade settlements are the sweeping sanctions which the Western powers imposed against Russia, which as a major global energy producer and member of the BRICS alliance, is a major trade partner with China. In addition, the nation of India has also moved away from the use of the dollar, and toward the use of rubles and rupees in its mutual trade with Russia.

Since the West began imposing sanctions on Moscow last year, Russia has been increasing its use of alternative currencies in its international trade settlements. President Vladimir Putin has promoted the use of the yuan not only in trade with Beijing, but also in Russia’s transactions with nations in Africa and Latin America. The Bank of Russia’s latest data shows the yuan is now a major component of Russia’s foreign trade.