On October 6th, the conference room of BHP Billiton Group headquarters in Australia was brightly lit, and a settlement agreement marked "urgent" was finally signed by executives. The most prominent place on the document is no longer the dollar symbol, but the "¥" symbol of the RMB.On the same day, Brazil's Vale and Australia's Rio Tinto also announced that they would accept RMB settlement.
Almost at the same time, Indian Oil Corporation also completed the RMB payment process for Russian crude oil. In just three months, India bought three batches of Russian oil in RMB. This commodity settlement system, which was originally firmly controlled by the US dollar, is quietly changing lanes and overtaking. What events caused the dollar to retreat step by step? Why can the RMB suddenly break through against the trend?
At the end of September 2024, China Mineral Resources Group made a bold decision. Suspension of receipt of all US dollar-denominated BHP iron ore.This is a very rare strong operation in the iron ore industry. To know, China imports 72% of the total amount of iron ore annually in the world, of which 60% comes from Australia.
This was not an impulsive decision, but a long-planned countermeasure. As early as late August, at the China-Australia negotiating table, BHP Billiton proposed a 15% increase in its 2025 offer and insisted on settlement in US dollars, which directly angered China. China steel companies have already lost US$23 billion in 2023 due to rising prices. Making concessions this time is tantamount to cutting off meat.
China doesn't talk nonsense and takes action directly. As soon as the news of the suspension of US dollar settlement iron ore came out, the ore in Australian ports was unsalable. The inventory of BHP Billiton's Newman mining area exceeded 30 million tons. Twelve cargo ships were waiting for manifests at the port, and the daily storage cost exceeded US $2 million.Seeing that the situation was out of control, BHP Billiton executives flew to Beijing and offered to accept RMB settlement and abandon the tough demand of "lock-in prices throughout the year."
In early October, the agreement was formally signed. Since the fourth quarter, 30% of BHP Billiton's spot iron ore transactions with China have been settled in RMB.
Meanwhile, another war broke out in South Asia.In early October, the Indian Petroleum Company completed the third Russian crude oil procurement transaction settled using the RMB.Behind this was not India’s proactive choice, but the hard conditions put forward by Russia: Only in yuan or rubles, and no longer in dollars or dinars.。
India wanted to push for rupee settlement, but Russia directly refused. Rupees are difficult to be freely convertible and deposited into accounts cannot be circulated. Russia has returned rupees paid by India several times. No way, India can only use RMB reserves to complete the transaction.
Behind this shift is India's strong dependence on Russian crude oil. From a 1% share at the beginning of 2022 to 35% in 2025, Russia has become India's largest oil supplier. In the past three years, India has saved US $12.6 billion thanks to discounts on Rosneft.
Of course, the United States will not be ignored. The Biden administration has repeatedly threatened tariffs and demanded that India stop Russian oil trade.But India's response was very realistic: "Unless you can sell me the same cheap oil." Faced with energy security and practical interests, India chose the yuan.
The breakthrough of the yuan is not a coincidence.In the first half of 2025, the International Settlement Bank data showed that the global foreign exchange transaction volume of the yuan has reached $817 billion per day, accounting for 8.5%, which is the world’s fastest growing currency.At the same time, the global reserve share of the dollar has fallen to 57.7%, to a new low in 30 years.
This is not a short-term fluctuation of the market, but a concentrated outbreak of the "dollarization" trend over the years, especially after the Russian-Ukrainian conflict in 2022, when the United States froze Russia's $300 billion overseas assets, kicking it out of the SWIFT system, which shocked many national central banks.
They start to worry, today it is Russia, tomorrow it will be ourselves. The dollar is no longer a “safe asset” but a “weapon” that can be frozen at any time.As a result, global central banks began to adjust the structure of foreign reserves, and the attractiveness of RMB as an emerging currency rose rapidly.
Instead of shouting slogans, China promoted the internationalization of RMB by "boiling frogs in warm water". China is the largest trading country in the world, and its annual trade volume of goods with the world is huge. The amount of cross-border RMB receipts and payments reached 35 trillion yuan in the first half of 2025, a year-on-year increase of 14%.
Among them, the amount of RMB receipts and payments for trade in goods reached 6.4 trillion yuan, accounting for 28% of the total receipts and payments in local and foreign currencies, a record high. This trade-based settlement method allows RMB to have a real usage scenario, instead of relying on financial speculation.
example, India exports 20 billion yuan of agricultural products to China, which can be used to pay for Russian crude oil, forming a closed circle.。 Refiners in Vietnam and Malaysia have also begun to follow suit, and the amount of Russian oil purchased in RMB in a single month exceeded 5 billion yuan.
In 2023, the global RMB settlement ratio of iron ore was only 5%. By the first half of 2025, it has exceeded 25%, and is expected to exceed 40% in 2026. This change is not just a change in proportional figures, but a fundamental subversion of the market structure.
Australian Prime Minister Albany said the compromise was "disappointing", but the reality is that China is the only big buyer, and without the Chinese market, Australian ore is nowhere to go.
The situation in the US is becoming increasingly embarrassing. On the one hand, in order to reduce the trade deficit, the United States began to shrink its balance sheet, raise interest rates, and reduce imports, but this also reduced the output of US dollars.The core of the US dollar hegemony is the "oil dollar" system, the United States buy global oil in US dollars, and other countries only use US dollars.
If commodities such as crude oil and iron ore are no longer settled in US dollars, the demand for US dollars will drop sharply. The United States wants to reduce its deficit, but it is unwilling to give up its currency hegemony. This contradiction puts the Federal Reserve in a dilemma.
China has gone another way. We did not blindly pursue financial openness, but promoted the internationalization of the RMB step by step through a stable trade surplus and a step-by-step financial system reform.The cross-border payment system has been gradually optimized, financial supervision has been gradually upgraded, and the internationalization of RMB is based on the real economy. Unlike the US dollar, which is exported by financial speculation, China relies on real goods and services.
This game of currency structure has just begun. From India's "holding its nose" to buy Russian oil with RMB, to Australian iron ore giants "kneeling" to sign the RMB agreement, the world has clearly seen that the hegemony of the US dollar is no longer unshakable. The RMB has quietly become a realistic choice for more and more countries. It does not rely on threats, no sanctions, just one contract, one shipment of goods, and one settlement.
The breakthrough of the RMB in key fields such as oil and iron ore is the result of China's economic strength, market size and international trust.This change is not a momentary rise, but the direction of the natural development of the market.
Source of information:
[1] "Russian oil traders have begun to ask Indian buyers to pay in RMB" Observer.com
[2] India's largest private oil refiner stops buying Russian oil Global Times