China's initiatives to internationalize the yuan, including currency swaps, e-currency, cross-border transactions and digital currency, are gaining momentum, particularly in Gulf states.
On November 28, 2023, the People's Bank of China and the United Arab Emirates' Central Bank renewed their currency swap agreement, valued at US$4.89 billion, for five years. The banks also signed a memorandum of understanding to strengthen cooperation in digital currency development.
Simultaneously, the Dubai Financial Market, Nasdaq Dubai and the Shanghai Stock Exchange signed a memorandum of understanding to foster digital financial cooperation. The first-ever purchase of liquified natural gas in yuan was made in March 2023, following the initiation of a China-UAE currency swap in 2012.
On November 20, 2023, the People’s Bank of China and the Saudi Arabian Monetary Authority agreed on a $6.98 billion currency swap for three years. Concurrently, Saudi companies were listed on the Hong Kong Stock Exchange, and Saudi Arabia began negotiations with Beijing to price some of its oil sales in yuan, potentially undermining the US dollar's global petroleum market dominance and indicating a shift towards Asia.
Source: asiatimes.com