The Industrial and Commercial Bank of China (ICBC) has taken the first steps toward enabling institutions to issue and clear financial products with a Chinese renminbi (RMB) in the US. The bank’s New York branch this week issued an RMB-denominated deposit that will be settled in the US in a move that paves the way for other borrowers to do the same. BNY Mellon acted as the issuing agent.
“The launch represents a significant milestone in serving to meet the growing demands among investors in the United States and around the world to have access to the RMB,” says ICBC chairman Jiang Jianing. “The RMB is an increasingly important part of the global payments system, as payments in this currency are growing faster than overall global payments in all currencies.”
A working group chaired by US business magnate Michael Bloomberg that aims to help establish the trading and clearing of the currency in the US says the step will strengthen financial relationships between the two countries.
“I’m pleased to see members of the Working Group taking this concrete step to further develop RMB markets in the United States,” says Bloomberg, in a statement. “I’m confident this will be the first of many developments to come.”
According to SWIFT, the global messaging service for financial institutions, the value of RMB payments grew 18.46% from February this year to March 2016. That comes in significantly higher compared with a 10.67% increase across all payments currencies in the same period.
The United Kingdom’s RMB payments value increased by 21% between March 2014 and March 2016, positioning the UK as the first offshore RMB clearing centre after Hong Kong, according to SWIFT.
SWIFT has announced that it has successfully completed the first phase of the global payments innovation (GPI) initiative pilot, clearing the way for the go-live of the service in early 2017.
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