Bypassing the US-dominated infrastructure for global trade, the People’s Bank of China reportedly announced connecting 10 ASEAN and Middle Eastern nations, mitigating the need for the US-based SWIFT system for international trade in these regions.

The Digital Yuan, called Digital RMB, connected 10 ASEAN (Association of Southeast Asian Nations) consisting of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, and six Middle Eastern nations, including the UAE.

This undercuts SWIFT (Society for Worldwide Interbank Financial Telecommunications), the US-based system for international trade transactions.

As per reports, the blockchain-run transaction system of China warps international settlements down to seven seconds and takes 3-5 business days with SWIFT.

Moreover, Digital RMB will cut down transaction fees for these channels by 98%, as per reports.

This can shift the power for international trade from the US to China, as expanding networks with ASEAN and Middle Eastern nations will bypass 38% of existing SWIFT traffic.

Before this, the BRICS nations including Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates, have pondered upon the idea of having a currency of their own, to lower the dependency on the US dollar.

This comes after what experts term an ‘all-out trade war’ between China and the US after US President Donald Trump imposed a 54% reciprocal tariff on China. The South Asian giant, in turn, imposed an additional tax 34% tariff on US imports.

In response to a related query, Chinese Foreign Ministry spokesperson Lin Jian said at a daily news briefing that the United States, under the guise of ‘reciprocity’, acted in a manner that prioritizes its own interests at the expense of other nations’ legitimate benefits. This approach places “America First” above international rules, exemplifying ‘unilateralism, protectionism, and economic bullying’.

Lin added that the Chinese government has issued its position on opposing US abuse of tariffs, making clear its solemn attitude.