Parallel Currency: The New Reality of De-Dollarization in a Multi-Polar World

In May 2026, seemingly scattered but interconnected signals arrived within a span of ten days.

Signal 1: BRICS de-dollarization achieves substantive progress. The BRICS payment system has reached a breakthrough (GIS Reports / Asia Times). Iran launches the "Hormuz Yuan" trading system (Watcher Guru), challenging the petrodollar infrastructure.

Signal 2: Renminbi internationalization enters a new phase. The New York Times publishes "War and Sanctions Accelerate China's Currency Push," arguing that Western sanctions on Russia have unexpectedly strengthened the renminbi's appeal. Forbes reports the same trend — RMB has shifted from policy-driven to market-demand-driven growth.

Signal 3: The Belt and Road shows "resilience and iteration." Reuters Breakingviews headlines: "China's resurgent Belt and Road is built to last." Nature publishes the complete 2013-2023 Belt and Road energy investment dataset — the most comprehensive quantitative foundation for BRI research to date.

Signal 4: US academia and strategic circles begin reassessment. But the Lowy Institute delivers a cold shower: the gap between BRICS de-dollarization grand ambitions and reality. The Atlantic Council's Dollar Dominance Monitor shows RMB at roughly 2-3% of global reserves — still far from the dollar's 59%.

This is not a "who wins, who loses" game. It's the construction of a parallel system.

De-Dollarization: Real Progress vs. Real Constraints

Real Progress

Three primary forces are driving de-dollarization.

Sanctions weaponization accelerates alternative demand. The NYT's judgment is concise: freezing Russia's central bank reserves and cutting off SWIFT made dollar-holding central banks aware of a systemic risk — your dollar reserves could be "weaponized" in a political conflict. This isn't ideological pro-China sentiment. It's rational risk-management hedging.

"Grassroots de-dollarization" in trade settlement is happening. In Central Asia — China-Central Asia gas pipeline settlements are increasingly in RMB. In Africa — the Atlantic Council reports the renminbi is winning African markets, though still far from challenging the dollar. In the Middle East — Iran launches the Hormuz RMB trading system, creating non-dollar options for oil settlement. In Latin America — America Quarterly reports China's new LatAm strategy shifting from resource extraction to technology cooperation, with RMB settlement as a supporting tool for service trade.

China's self-built infrastructure is operational. CIPS (Cross-Border Interbank Payment System) transaction volumes are growing. While global coverage still lags far behind SWIFT, a viable alternative already exists. China's network of bilateral currency swap agreements forms the "capillaries" of RMB internationalization. BRI contracts are increasingly denominated in RMB — from infrastructure to energy cooperation.

Real Constraints

Carnegie Endowment's "BRICS De-Dollarization and the Real Constraints on the RMB's Role" provides a balanced perspective. Core observation: BRICS member interests are not aligned.

• Russia desperately wants to escape the dollar (already sanctioned).
• China pushes cautiously, knowing "RMB internationalization takes time."
• India and Brazil are reluctant to abandon the dollar system — they hold large dollar reserves and have strong trade ties with the US.
• OPEC producers like Saudi Arabia have no incentive to disrupt the petrodollar system — it's their "oil for security" foundation.

AIER (American Institute for Economic Research) provides objective academic analysis: reasons for de-dollarization are real, but the constraints are equally powerful.

The Lowy Institute's conclusion is most direct: a reality check on the BRICS de-dollarization agenda shows this goal is much more distant than imagined.

A wildcard: Trump may relax sanctions on Russia. If Russia returns to the dollar settlement system (Semafor reports), de-dollarization loses its biggest real-world case study.

The New Logic of RMB Internationalization

Forbes's May 2026 article makes a critical observation: the logic of RMB internationalization is changing.

From policy-driven to market-demand-driven. Earlier RMB internationalization was mainly pushed by Chinese government policies: currency swap agreements, offshore RMB center development, BRI-related financing. But in 2026, the driver is shifting — emerging market countries are actively seeking RMB settlement because they need a reserve currency that can't be weaponized by geopolitics.

The "won't depreciate" RMB narrative. China-US Focus argues the renminbi shows relative stability — not because it's a perfect currency, but because it's an "anchored" one (strong state control, not fully open capital account).

East Asia Forum's observation: China is opening its capital account at its own pace — carefully controlled gradual opening.

Fair Observer's critique: China uses RMB and CIPS to challenge the dollar, but with limited effect. The core problem — RMB's convertibility is restricted, international investors can't freely enter and exit Chinese markets.

BRI 2.0: From Infrastructure Export to Deep Cooperation

From "quantity" to "quality." Early BRI's biggest criticism was the "debt trap." In 2026, reports from ODI and ICTSD show BRI is shifting to a more refined model anchored by host country institutional capacity. ICTSD's conclusion: host country ownership determines project success or failure.

From infrastructure to energy + digital. Nature's 2013-2023 BRI energy investment dataset covers a decade of all energy projects. Digital BRI, Green BRI, and Health Silk Road are forming — BRI is evolving from pure infrastructure to a multi-dimensional framework combining technology, standards, and investment.

Africa: head-on competition. The Africa Center for Strategic Studies (US) published a 2026 China-Africa outlook. Dangote (Africa's richest man) publicly states "Why China Wins in Africa — on Credit," acknowledging China's credit support model's advantage. But ODI notes that China's economic footprint in Africa is also triggering competition and backlash.

Latin America: a new playbook. America Quarterly notes China's rules in Latin America have changed — shifting from resource extraction to technology cooperation, digital infrastructure, and EV supply chain deployment.

Critical Minerals: The Invisible Battlefield

A SAIS Review (Johns Hopkins) analysis reveals an under-reported new dimension: China's global critical minerals strategy.

In the energy transition, lithium, cobalt, rare earths, and graphite are becoming the 21st century's "oil." China is acquiring/equity-staking overseas mines (Congo cobalt, Chilean lithium), controlling global processing capacity (60%+ of rare earth processing), and binding mineral trade to RMB settlement — building a new dimension underlying de-dollarization.

FTI Consulting's "Lender to Market Maker" report notes the US government finally realizes the financial pricing power battle over critical minerals is accelerating — but the response strategy is only just beginning.

Conclusion: Not Replacement, But Parallel Systems

The May 2026 de-dollarization landscape isn't a simple "dollar decline" story.

A more accurate description is the construction of a parallel system:

• The dollar still accounts for 59% of global reserves, RMB ~2-3%
• SWIFT daily transaction volumes still dwarf CIPS by multiple orders of magnitude
• But an alternative RMB-centric trade, reserve, and settlement network is slowly but steadily expanding
• The Belt and Road and BRICS mechanisms provide the political and real-economy support for this parallel system

CFR's Dollar Dominance Monitor title is correct — the dollar remains dominant. But the definition of "dominant" is shifting from "the only option" to "the primary option."

Direct implications for businesses and investors:

• Settlement risk diversification. For countries with large trade volumes with China, establishing RMB settlement channels is no longer a "nice-to-have" option.
• BRI project financing. RMB-denominated debt financing is increasingly available — though FX risk remains.
• Currency hedging. Dollar assets + RMB assets + multi-currency portfolios are becoming the framework for more central banks.
• Critical mineral supply chains. Dynamic balance is needed between "China-dominated processing chains" and "US backup chains."

References

1. NYT — "War and Sanctions Accelerate China's Currency Push", May 2026
2. Forbes — RMB internationalization shifting from policy-driven to market-demand-driven, May 2026
3. Atlantic Council — Dollar Dominance Monitor; RMB progress in African markets, 2026
4. Carnegie Endowment — "BRICS De-Dollarization and the Real Constraints on the RMB's Role", 2026
5. CFR — Dollar Dominance Monitor, 2026
6. Lowy Institute — Reality check on BRICS de-dollarization agenda, 2026
7. ODI — BRI development and host country institutional capacity, 2026
8. Nature (Journal) — 2013-2023 Belt and Road energy investment dataset, 2026
9. SAIS Review (Johns Hopkins) — China's global critical minerals strategy, 2026
10. GIS Reports / Asia Times — BRICS payment system breakthrough, May 2026
11. Reuters Breakingviews — "China's resurgent Belt and Road is built to last", May 2026
12. East Asia Forum — China's gradual capital account opening, 2026
13. America Quarterly — China's new LatAm strategy (resource extraction to tech cooperation), 2026
14. FTI Consulting — "Lender to Market Maker" critical minerals report, 2026
15. Semafor — Trump may relax Russia sanctions, 2026
16. Watcher Guru — Iran launches Hormuz RMB trading system, 2026
17. Fair Observer — CIPS and RMB challenge to dollar, limited effectiveness, 2026
18. AIER — Academic analysis of de-dollarization causes and constraints, 2026
19. China-US Focus — "Won't depreciate" RMB narrative, 2026
20. ICTSD — Host country ownership determines BRI project success, 2026
21. Africa Center for Strategic Studies — 2026 China-Africa outlook
22. European Business Magazine — BRI 2.0 analysis, 2026

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