Renminbi denominated products move closer to US reality
Trading and clearing in renminbi denominated financial products has taken another step forward with the announcement that the Industrial and Commercial Bank of China (ICBC) is issuing a certificate of deposit through its New York branch.
Previously, such certificates issued by New York branches of Chinese banks were settled through Euroclear in Europe, but the new certificate will be settled by the US-based Depository Trust Company, a wholly owned subsidiary of The Depository Trust & Clearing Corp (DTCC). BNY Mellon is the issuing and paying agent on the new certificate.
The issuance marks a result from the work of the Working Group on US RMB Trading and Clearing – whose members include ICBC itself, but also DTCC, BNY Mellon, and is chaired by former New York mayor Michael Bloomberg, with other well known people with links to the US financial sector such as Mary Schapiro (vice-chair), Thomas Donohue, Timothy Geithner and Henry Paulson Jr as co-chairs.
Launching the certifiate, IBC chairman Jian Jianqing noted that there is growing demand globally for renminbi denominated financial products, not just in the US. He said that payments in renminbi with the global payments system are growing faster than overall global payments in all currencies.
According to the Swift network, the renminbi was the fifth most active currency for global payments in March. The value of payments in the currency increased more than 18% between February and March.