Currently most of cross border payments depend on Swift and is based on the US$.

Payments can be made in other currencies but they are converted to US$ for settlement.

The use of Swift as a weapon for sanctions will force  sanctioned parties to seek other means to make or receive payments.

When sanctions were previously imposed on Russia that affected trade settlement on China - Russia trade, China came out with CIPS in 2015.

The volume of transactions handled by CIPS is growing but is still tiny compared with  Swift. CIPS also make use of the messaging services of Swift.

CIPS is not in the position to take over from Swift yet.

However this latest round of sanctions will force CIPS to be developed further and increase its adoption.

China has also introduced its CBDC in the form of a digital yuan.

Selected cities in China were used to implement the digital yuan. It was also used in the recently concluded Winter Olympics.

The digital yuan has not been implemented throughout the whole of China yet and it is not widely used enough to replace the US$ as the world trade currency.

However the use of Swift and US$ as weapons will push the move to the Chinese instruments.

The USA will hurt itself in the long run.

The article below is taken from the Global Times