Kenya’s Big Currency Switch: A Breath of Fresh Air
Last month, Kenya quietly made history. The government converted a whopping 5 billion USD—setting a record for a single project—into yuan. That funding backs the Mombasa-Nairobi railway, built by China Road and Bridge Corporation. This wasn’t just a line-item adjustment on a spreadsheet: it was a loud financial and political statement.
Why make the change? Officially, Kenya judged its debt to be far too exposed to one single currency, the US dollar. By switching to yuan, the nation expects to save an impressive 215 million USD per year just in interest, with loan rates hovering around 3%. For a country whose debt has doubled between 2013 and 2023, that’s not just helpful—it’s a lifeline.
Beyond Numbers: A Bold Geopolitical Signal
But the story doesn’t stop at spreadsheets. This switch isn’t just about balancing the books; it sends a powerful geopolitical message—the choice of the Chinese currency on a continent where Beijing is already funding over 50 billion USD in transport projects.
Why isn’t everyone jumping at the chance to use the yuan? There’s a catch: Beijing still keeps the yuan on a tight leash. Capital flows are carefully controlled, certain government bonds are reserved for domestic investors, and full convertibility of the currency is still out of reach.
China’s economy also remains highly state-controlled: 85 out of its 135 largest companies are publicly owned. This dampens financial fluidity. For central banks worldwide, the dollar and the euro remain the easiest currencies to handle—simply because anyone, anywhere, can buy or sell unlimited amounts with minimal interference from monetary authorities. That freedom of exchange is a big part of why the euro and the dollar are seen as reliable currencies.
The « Tianjin Bloc »: Rebalancing Global Power?
One photograph made waves: in Tianjin, Chinese leader Xi Jinping stood surrounded by global South leaders—India, Russia, Egypt, Iran, the United Arab Emirates, Brazil… Collectively, they account for half of the world’s population and a quarter of its GDP. Though the so-called “Tianjin Bloc” doesn’t officially exist, it symbolizes a shared determination: to rebalance global economic power and free themselves from dependence on the dollar.
Together, these countries hold over 40% of the world’s dollar reserves (with China alone holding 27%). If they decided to shift just 3 to 5 percentage points of those reserves into Chinese yuan, it could raise the yuan’s share to around 6% of global currency reserves—roughly the same level as the Japanese yen or British pound sterling. That would be a seismic geopolitical leap.
Yuan on the Rise: China’s Moves to Open Up
China is doing more than sending signals—it’s building the foundations of an alternative financial system.
- The country’s central bank has expanded swap agreements with Southeast Asian partners and the European Central Bank.
- In Shanghai, an international digital yuan center has opened, designed to make cross-border payments simpler and more efficient.
Step by step, Beijing is laying down the bricks of a system in which its global partners can trade, invest, and borrow in yuan—side-stepping Western markets.
Another important sign: on December 8, 2025, Russia is set to issue its first ever government bonds denominated in yuan. This is a historic first. Moscow will use its surplus of yuan—earned from energy exports to China—to finance itself locally, bypassing Western financial avenues altogether.
Since Western sanctions in 2022, Russia has been cut off from American and European financial circuits. It now relies on the Chinese financial sphere. The big question: who will actually lend to Russia? Likely candidates are Chinese and Asian funds, and perhaps actors tied to this emerging “Tianjin Bloc” orbiting around Beijing.
In short: while the global monetary landscape is slow to change, moves like Kenya’s switch—and China’s expanding influence—show that the era of unchallenged dollar dominance might not last forever. We’re not quite at the point where you’ll be buying your morning coffee in yuan, but the winds of change are starting to blow.
John is a curious mind who loves to write about diverse topics. Passionate about sharing his thoughts and perspectives, he enjoys sparking conversations and encouraging discovery. For him, every subject is an invitation to discuss and learn.
