Chinese yuan Photo:VCG

"Which currency should China and Russia use in bilateral trade? Whichever currency that is safe, efficient and credible," Chinese Foreign Minister Qin Gang said at a press conference on the sidelines of the ongoing Two Sessions on Tuesday when asked by a Russian news agency on the state of currency settlement for trade between China and Russia.

Foreign Minister Qin noted that global currency should not be used as a trump card for unilateral sanctions, still less as a disguise for bullying and coercion.

China and Russia are vital trading partners, with a total bilateral trade volume exceeding $190 billion in 2022. 

Qin's remarks also come as media reports suggest that the Chinese yuan for the first time exceeded the US dollar to become the most-traded currency at the Moscow Exchange, a major Russian bourse, in February.

The exchange said yuan transactions amounted to 1.48 trillion ruble ($19.6 billion) and accounted for nearly 40 percent of all transactions, higher than the US dollar's near 38 percent and euro's 21.2 percent. 

Amid the West's SWIFT sanctions against Russia and rising geopolitical tensions, more countries began to realize the importance of having an alternative for international payments. This trend has provided an impetus for yuan's growing internationalization.

In February, major oil-producing country Iraq is reportedly pivoting to Chinese yuan to settle imports from China with the Central Bank of Iraq announcing plans to allow trade from China to be settled in yuan.

In September 2022, China said it welcomes Russian and Mongolian financial institutions to join the yuan-based Cross-border Interbank Payment System to build a strong bulwark of financial security in the region.