Yuan Payments Sent from Europe to China Increased by 105% YoY with New RMB Clearing Banks
- The Chinese central bank continues to push for the internationalization of the Yuan as a trade facilitator for its export driven economy and European firms are quick to adopt to payments in the Chinese currency.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) announced today that Europe now represents 10% of the Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term worldwide by value in yuan (RMB or Renminbi as the Chinese currency is also called). In addition, European payments directly exchanged with China in RMB have increased by 105%, showing a considerable upwards trend in yuan usage on the continent following the recent addition of clearing banks in some of the E.U's financial hubs.
According to Swift's Monthly RMB Tracker report, during the past year, four European countries have been settling into the top ten foreign yuan payment markets. In the UK over the last 12 months, payments made in the Chinese currency increased by more than 120%. France, Germany and Luxembourg have also seen rapid yuan adoption, as in the three countries renminbi payments increased respectively by 43.5%, 116% and 41.9%. The yuan strengthened its position as the seventh most used global payments currency and accounted for 1.57% of global payments.
"The fact that Renminbi payments between Europe and Greater China have more than doubled in a year is extremely encouraging news for European businesses and governments," said Vina Cheung, Global Head of RMB Internationalisation, Payments and Cash Management, HSBC,. "It shows businesses are seizing the opportunity presented by China's currency liberalisation programme to deepen their commercial relationships in the world's second largest economy. It also shows government efforts to build hubs for RMB trading and investment in Europe are starting to bear fruit," Cheung added.
For most of these European hubs, Greater China (including Hong Kong) still remains the main trading partner in RMB. However, there seems to be a noticeable shift in business for some countries like Luxembourg, with an increasing share of offshore flows, meaning outside the Greater China area. Michael Moon, Director, Payments Markets, Asia Pacific at SWIFT, commented: “Over the past year, Chinese authorities and financial institutions announced new partnerships with European countries, making them official Clearing Clearing Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Read this Term centres for the renminbi. In the future, we should see a bigger contribution from truly offshore flows in the internationalization of the Chinese currency.”
In July, a bilateral currency swap agreement between the People’s Bank of China and Swiss National Bank is also putting Switzerland in line to becoming a new RMB hub in Europe. The Chinese central bank continues to push for the internationalization of the yuan as a trade facilitator for its export driven economy. Last month, South Korea was approved for a yuan clearing bank and the currency quickly gained popularity. Also recently, the Bank of China’s Hong Kong subsidiary (BOCHK), the official clearing bank of the yuan in Hong Kong, announced it is set to extend its yuan clearing service hours to cover the London trading session so that it will be better equipped to compete and cooperate with global banks.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) announced today that Europe now represents 10% of the Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term worldwide by value in yuan (RMB or Renminbi as the Chinese currency is also called). In addition, European payments directly exchanged with China in RMB have increased by 105%, showing a considerable upwards trend in yuan usage on the continent following the recent addition of clearing banks in some of the E.U's financial hubs.
According to Swift's Monthly RMB Tracker report, during the past year, four European countries have been settling into the top ten foreign yuan payment markets. In the UK over the last 12 months, payments made in the Chinese currency increased by more than 120%. France, Germany and Luxembourg have also seen rapid yuan adoption, as in the three countries renminbi payments increased respectively by 43.5%, 116% and 41.9%. The yuan strengthened its position as the seventh most used global payments currency and accounted for 1.57% of global payments.
"The fact that Renminbi payments between Europe and Greater China have more than doubled in a year is extremely encouraging news for European businesses and governments," said Vina Cheung, Global Head of RMB Internationalisation, Payments and Cash Management, HSBC,. "It shows businesses are seizing the opportunity presented by China's currency liberalisation programme to deepen their commercial relationships in the world's second largest economy. It also shows government efforts to build hubs for RMB trading and investment in Europe are starting to bear fruit," Cheung added.
For most of these European hubs, Greater China (including Hong Kong) still remains the main trading partner in RMB. However, there seems to be a noticeable shift in business for some countries like Luxembourg, with an increasing share of offshore flows, meaning outside the Greater China area. Michael Moon, Director, Payments Markets, Asia Pacific at SWIFT, commented: “Over the past year, Chinese authorities and financial institutions announced new partnerships with European countries, making them official Clearing Clearing Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Read this Term centres for the renminbi. In the future, we should see a bigger contribution from truly offshore flows in the internationalization of the Chinese currency.”
In July, a bilateral currency swap agreement between the People’s Bank of China and Swiss National Bank is also putting Switzerland in line to becoming a new RMB hub in Europe. The Chinese central bank continues to push for the internationalization of the yuan as a trade facilitator for its export driven economy. Last month, South Korea was approved for a yuan clearing bank and the currency quickly gained popularity. Also recently, the Bank of China’s Hong Kong subsidiary (BOCHK), the official clearing bank of the yuan in Hong Kong, announced it is set to extend its yuan clearing service hours to cover the London trading session so that it will be better equipped to compete and cooperate with global banks.