SWIFT’s RMB Tracker shows that United States’ RMB payments value increased by 327% between April 2013 and April 2014, placing the United States back at #3 in the world for offshore RMB payments value, offshore renminbi excludes mainland China and Hong Kong.
Michael Moon, Head of Payments, Asia Pacific, SWIFT states: “The growing adoption of RMB payments in the United States to China/Hong Kong corridor is a significant milestone that further promotes the cross border use of the currency. Although the corridor remains dominated by the US dollar, data suggests that the United States is increasingly using the RMB to support its corporates that want to reach more suppliers in mainland China. This is good news for the internationalization of the RMB as a world payments currency.”
The value of RMB payments in the US has increased by 327% in the year to April 2014, while their value between the US and China/Hong Kong jumped 229% over the same period.
Overall, the RMB held its position as the seventh-ranked global payments currency and accounted for 1.43% of global payments, a slight decrease from 1.62% in March 2014. At a global level, all currencies increased in value by 0.6% during the month of April.
While the USA lags behind with domination of the USD it’s friend across the pond has goals of becoming the #1 RMB clearing center for offshore RMB payments. It is a goal stated by financial leaders in the UK, the UK’s government announced in late March that it had secured a London-based RMB clearing and settlement bank following negotiations with the Chinese authorities.
The UK chancellor of the exchequer, George Osborne, intends to ensure London will be “the leading western center for trading, clearing and settlement in the Chinese currency,” but it will be up against competition from Frankfurt, which is also set to host a renminbi settlement and clearing infrastructure. The USA lags behind and only the Pacific oriented financial hub of San Francisco has shown interest in becoming a RMB hub. It would join Hong Kong, London and Singapore as places where offshore trading in yuan is growing, as China slowly moves to open up its financial system.