Clearstream Spotlight

Offshore centres in Europe Clearstream’s RMB key to RMB internationalisation market approach

A new study commissioned by procedures need to be improved. Clearstream supports the Clearstream from Aite Group shows Aite Group’s research provides a internationalisation of the RMB by that market participants in Asia and unique insight into financial markets’ bringing together market providers Europe expect the development of growing interest in the Chinese and participants from across the offshore centres in Europe to play a currency. The findings reflect the community to collectively key role in fostering global liquidity for potential for RMB growth whilst support the growth and increasing China’s international trading currency, identifying key barriers to the further maturity of the offshore RMB market. the Renminbi (RMB). development of the offshore RMB, which financial market infrastructures As a result, Clearstream customers Aite Group held detailed interviews such as Clearstream can help address. will benefit from a greater exposure to with 24 top firms in the financial the Chinese market, increased cash industry in Asia and Europe to capture Efficient infrastructure key liquidity and reduced risk. New their views on the internationalisation to success products and services will not only of the RMB and the development of According to the study, the facilitate investment but also cash European offshore centres. The aim establishment of an efficient and management, trade finance and other of the study on ‘Internationalising the recognised infrastructure as well commercial financial activities in RMB. RMB: Weaving a Web for the Next as the optimisation of liquidity will Chinese investors will benefit from World Currency’ was also to analyse be the main success factors for the lower funding costs. the current state of RMB hubs in international development of the China. RMB market. It is therefore crucial that market infrastructures such as The majority of interview respondents Clearstream continue to facilitate believe that Europe will play a key role the issuance, and custody in the currency’s internationalisation of RMB-denominated bonds in the process, though some raised European market. Clearstream Clearstream questions around its long-term already leverages its global settlement Optimising Renminbi future once markets in China have and liquidity been liberalised. 61 % of respondents infrastructure to accelerate and believe a developed European optimise the liquidity of the offshore infrastructure is key to the success RMB cash supply. of the RMB. A currency on the rise Operational barriers The internationalisation of the RMB Operational issues remain the biggest will be a three-step process in which barrier to the use of RMB within the currency is first used as a global trade finance and payments. In trade and payment currency, then as a particular, a lack of broker global investment currency and finally readiness for operating in RMB as a global reserve currency. As a (32 %) and translation issues (32%) trade currency, the RMB has rapidly are the main challenges according gained importance in recent years and to survey respondents. In addition, is now the second most used currency invoicing, accounting and bookkeeping for trade finance in the world.

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