China is taking its first steps toward paying for imported crude oil in yuan instead of the U.S. dollar, three people with knowledge of the matter told Reuters, a key development in the Chinese government's efforts to establish its currency internationally.
Shifting just part of global oil trade into the yuan is potentially huge. Oil is the world's most traded commodity, with an annual trade value of around trillion, roughly equivalent to China's GDP last year.
A pilot program for yuan payment could be launched as early as the second half of this year, two of the people said. Regulators have informally asked a handful of financial institutions to prepare for pricing China's crude imports in the yuan, said the three sources.