Russia has agreed to use the Chinese yuan as the main currency for the planned Shanghai Cooperation Organization (SCO) Development Bank. This was reported by Qazaqyia.kz citing WSJ.
According to the publication, Moscow had consistently resisted this step for over a decade, fearing the expansion of Beijing's economic presence. However, prolonged financial isolation forced the Russian side to radically reconsider its position.
The abandonment of years-long resistance is due to external pressure. As a result of sanctions, Russia has been cut off from financing even through friendly multilateral institutions, including the Asian Infrastructure Investment Bank and the BRICS New Development Bank, both based in China. Having lost access to traditional capital, Moscow was forced to accept Beijing's terms for integrating the yuan into the SCO structure. In exchange, the Russian side requested guarantees that the new development bank would operate outside the jurisdiction and restrictions of Western sanctions.
According to analysts, the expected launch of the SCO Development Bank on Chinese financial terms will further bring Central Asian states, including Kazakhstan and Uzbekistan, closer to Beijing, cementing its status as the dominant power in the region.
This concession illustrates a structural shift in bilateral relations, where Russia has transitioned to the status of a junior partner. Beijing's financial dictate is reinforced by a record trade imbalance. China accounts for nearly 40% of Russia's total trade volume, while Russia's share in Chinese trade turnover is less than 4%. Similar pressure is observed in the energy sector, where Beijing blocked the signing of a contract for the strategic Power of Siberia 2 gas pipeline, categorically demanding price subsidies to the level of the domestic Russian market.
In September 2025, President of Kazakhstan Kassym-Jomart Tokayev supported the initiative to create the SCO Development Bank. The creation of this supranational financial institution has been discussed by member countries for several years to ensure independent financing of large infrastructure and regional projects within the Shanghai Cooperation Organization space.
The launch of the SCO Development Bank is seen as a key tool for economic cooperation, capable of reducing the dependence of Central Asian states and other bloc participants on Western financial structures. Integration of settlements in national currencies (including the Chinese yuan) is expected to become the functional basis of the new bank's operations.
The Shanghai Cooperation Organization (SCO) is an international association founded in 2001 by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Today, the organization also includes India, Pakistan, Iran, and Belarus. The SCO unites states for cooperation in security, economy, transport, energy, and humanitarian ties, as well as coordinating efforts to combat terrorism, extremism, and cross-border crime.