Development
Until the early 2000s,the Renminbi (RMB) was not convertible and its flow in and out of China was tightly restricted. The first step toward liberalisation came in 2004,when China began allowing limited border trade settlements in yuan. That same year,banks in Hong Kong were permitted to offer RMB deposit-taking,exchange,remittance,and card services for personal accounts,following approval by the State Council and arrangements with the Hong Kong Monetary Authority (HKMA). By 2009,RMB deposits in Hong Kong had risen from ¥12 billion in 2004 to ¥59 billion,and the territory emerged as the largest offshore centre for RMB activity. [2]
The internationalisation push accelerated after the 2007–2008 financial crisis. In July 2007,the China Development Bank issued the first offshore RMB-denominated bonds in Hong Kong,creating the “dim sum bond”market,which expanded rapidly as banks,corporations such as McDonald’s,and supranational institutions like the Asian Development Bank issued debt in offshore RMB (CNH). By 2013,the market had grown to ¥310 billion outstanding. [3] In parallel,Taiwan developed a Formosa bond market after signing a 2012 memorandum with Beijing,and similar RMB bond issuance spread to Singapore and other centres.
On 24 December 2008,China launched the Cross-Border Trade RMB Settlement Pilot Project,initially limited to Yunnan–ASEAN and Guangdong–Hong Kong–Macau trade. By 2010,the pilot expanded to 20 provinces,municipalities and autonomous regions,and by 2014 RMB settlements reached ¥5.9 trillion,or 22% of China’s trade volume. [4]
From 2009 onward,the People’s Bank of China (PBoC) signed a growing number of currency swap agreements with central banks,covering countries such as Argentina,Brazil,Turkey,South Korea,and the UK. [5] In August 2010,the PBoC allowed central banks and offshore clearing banks to invest surplus RMB in the onshore China Interbank Bond Market,and soon afterwards permitted outward direct investment (ODI) in RMB. That year,China and Russia began trading in their own currencies,abandoning the United States dollar in bilateral trade,followed by a similar arrangement with Japan in 2011. [6] In December 2011,the Renminbi Qualified Foreign Institutional Investor (RQFII) programme was introduced to allow offshore RMB funds to invest in mainland securities markets. [7]
China also experimented with financial reforms through the Shanghai Free-Trade Zone (SFTZ),launched in 2013,where RMB could circulate more freely between Free Trade Accounts and offshore accounts. In the same year,the UK became the first G7 country to establish an official RMB swap line. By late 2013,the RMB had overtaken the euro to become the second-most used currency in global trade finance,behind only the U.S. dollar. [8]
Between 2014 and 2017,a series of liberalisations deepened offshore RMB use. The Shanghai–Hong Kong Stock Connect was launched in 2014 to allow cross-border equity trading,followed in 2017 by Bond Connect to link mainland and Hong Kong bond markets. The China International Payments System (CIPS) was established in 2015 as an alternative to SWIFT,and the World Bank issued the first SDR bonds payable in RMB in 2016. In 2018,yuan-denominated oil futures were introduced on the Shanghai International Energy Exchange,marking a step toward pricing commodities in RMB.
Further reforms removed barriers for inbound investors:in September 2019 the State Administration of Foreign Exchange (SAFE) abolished quotas under the Qualified Foreign Institutional Investor (QFII) and RQFII programmes,and in 2020 the two schemes were merged with simplified application and expanded investment scope. By 2020,the RMB accounted for 4.3% of global foreign exchange turnover and was held in reserves by more than 70 central banks,though it remained used for less than 2% of global payments.
Renminbi hubs outside China
Since the late 2000s, China has encouraged the creation of offshore hubs for the RMB to expand its international use. Early initiatives included bilateral swap agreements and the designation of clearing banks in major financial centres. In Asia, Hong Kong and Macau became the first and largest offshore markets, with RMB deposits, trade settlement, and bond issuance expanding rapidly after 2010. Singapore followed with the designation of ICBC as a clearing bank in 2013, bilateral swap facilities, and the launch of direct CNY/SGD trading in 2014. Taiwan and South Korea also established clearing arrangements with Bank of China (Taipei) and Bank of Communications (Seoul), while Japan began direct RMB–yen trading in 2012. Russia developed RMB–rouble trading on the Moscow Exchange starting in 2010, with turnover growing steadily through the 2010s. In 2025 Turkey signed an agreement with China to create a clearing system after earlier currency-swap cooperation.
In Europe, London quickly became the leading European hub, accounting for over 60% of RMB activity outside China by 2013 and later ranking second globally in RMB settlements via SWIFT. Frankfurt was designated an official clearing centre in 2014, reflecting Germany’s role as China’s largest EU trading partner. Paris and Luxembourg also grew as centres for RMB deposits and bond issuance, with Luxembourg emerging as the leading RMB securities settlement venue in Europe. Switzerland signed a swap line with China in 2014, expanding European access to RMB. In the Americas, Canada became the first country to sign a reciprocal currency deal with China in 2014, enabling direct trading between the Canadian dollar and the yuan. In the Pacific, Australia signed a swap agreement with the PBoC in 2012, established clearing arrangements by 2014, and invested part of its foreign reserves in RMB-denominated bonds.
By the mid-2020s, this network of offshore hubs stretching across Asia, Europe, North America, and Australia had created multiple channels for RMB clearing, bond issuance, and foreign exchange trading. [10]
| Appointed Date | Country | Clearing Bank | Clearing hour (GMT) |
|---|
| 24 December 2003 |  Hong Kong | BoC, Hong Kong [11] | 00:30-21:00 [12] |
| September 2004 |  Macau | BoC, Macau branch [13] | |
| 11 December 2012 |  Taiwan | BoC, Taipei branch [14] | |
| 8 February 2013 |  Singapore | ICBC, Singapore branch [15] | |
| 18 June 2014 |  UK | CCB, London branch [16] | |
| 19 June 2014 |  Germany | BoC, Frankfurt branch [17] | |
| 4 July 2014 |  South Korea | BoCom, Seoul branch [18] | |
| 15 September 2014 |  France | BoC, Paris Branch [19] | |
| 16 September 2014 |  Luxembourg | ICBC, Luxembourg [20] | |
| 3 November 2014 |  Qatar | ICBC, Doha | |
| 8 November 2014 |  Canada | ICBC, Toronto [21] | |
| 17 November 2014 |  Australia | BoC, Sydney [22] | |
| 6 January 2015 |  Thailand | ICBC, Bangkok [23] | |
| 6 January 2015 |  Malaysia | BoC, Malaysia [24] | |
| 25 May 2015 |  Chile | CCB, Santiago | |
| 28 June 2015 |  Hungary | BoC, Budapest [25] | |
| 9 July 2015 |  South Africa | BoC, Johannesburg [26] | |
| 17 September 2015 |  Argentina | ICBC, Buenos Aires [27] | |
| 30 September 2015 |  Zambia | BoC, Lusaka [28] | |
| 30 November 2015 |  Switzerland | CCB, Zurich [29] | |
| 21 September 2016 |  USA | BoC, NYC [30] | |
| September 2016 |  Russia | ICBC, Moscow | |
| December 2016 |  UAE | ABC, Dubai | |
Hong Kong 
Macau 
Taiwan 
Singapore 
UK 
Germany 
South Korea 
France 
Luxembourg 
Qatar 
Canada 
Australia 
Thailand 
Malaysia 
Chile 
Hungary 
South Africa 
Argentina 
Zambia 
Switzerland 
USA 
Russia 
UAE 
