BRICS bank pushes the yuan as the go-to funding currency for the Global South
The BRICS New Development Bank (NDB) is increasingly promoting the Chinese yuan as a preferred funding currency for infrastructure and development loans across the Global South. The case rests on two pillars: a liquid, well‑backed onshore bond market in China and relative stability of the yuan against the US dollar — factors that together translate into markedly lower borrowing costs for borrowers.
Zhongxia Jin, Director General for Treasury and Portfolio Management at the NDB, says the Chinese bond market “is now one of the most cost-effective funding sources in the world.” He argues the market is not merely an alternative but is evolving into “a key pillar of global financial architecture,” and that cheaper yuan-denominated funding can save borrowers millions in foreign-exchange expenses while boosting their lending capacity for projects.
Political backing is clear. Chinese President Xi Jinping has long pushed to expand the yuan’s international role, and the NDB is being used as a practical vehicle for that agenda. The bank began shifting away from US-dollar lending in 2022 and now disburses loans in the yuan as well as other local currencies such as the Indian rupee, Russian ruble and South African rand. Most of these loans target countries in the Global South, Latin America and across Africa.
Why this matters for crypto audiences
- De‑dollarization angle: Greater use of yuan for cross‑border financing can accelerate shifts away from dollar-dominated trade and settlement corridors — a trend crypto observers watch closely.
- Stablecoins and tokenized assets: Rising demand for yuan-denominated funding could create appetite for yuan‑pegged stablecoins or tokenized Chinese bonds to ease settlement and on‑chain liquidity for international projects.
- CBDC relevance: China’s digital yuan could be positioned as a natural settlement instrument alongside yuan lending, increasing real-world use cases for central bank digital currencies.
- Market flow effects: More capital flowing into China’s onshore bond market may influence global fixed-income markets and cross-border liquidity that crypto markets often arbitrage.
Bottom line: The NDB’s push for yuan lending combines market economics — lower borrowing costs via a liquid bond market — with strategic policy goals. For emerging markets it promises cheaper, local‑currency financing; for crypto and digital‑asset sectors it raises new possibilities (and risks) around yuan‑denominated instruments and cross‑border settlement.
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