BOC working to boost global power of renminbi

Offshore RMB market

The offshore RMB market is a key part of RMB internationalization. BOC promotes the use of RMB for commodity settlement, supports foreign trade enterprises in expanding the cross-border use of the RMB, enhances the RMB's function as an investment and financing currency and expands cross-border RMB application scenarios.

As the world's third-largest copper-producing region, the copper belt spanning the Democratic Republic of the Congo and Zambia has become a gathering place for projects involved in the BRI. To aid exchanges in the region, BOC opened RMB accounts for enterprises there and reviewed processes such as customs clearance, tax reporting and international payments to address practical issues encountered in RMB-denominated settlement.

This aided the enterprises' RMB-denominated copper product sales transactions with Chinese importers. After receiving the RMB payment, the enterprises can use part of the funds through the BOC Zambia branch to procure equipment from China. This has effectively helped the cyclic use of RMB involving settlement, utilization and repatriation.

In Malaysia, BOC adheres to achieving cross-border financial connectivity through the integration of technology, demand and application scenarios. In September 2024, BOC provided a clearing solution for Central Bank of Malaysia, the Bank Negara Malaysia, which has assisted the collaboration between PayNet (a clearing institution run by the Bank Negara Malaysia) and WeChat QR code payments. After that, BOC was appointed as the sole cross-border settlement bank in Malaysia. By the end of March, the average daily transaction volume had reached 12,600, representing a 5.97-fold increase since its launch.

In supporting the BRI, BOC promotes the use of RMB in financing large-scale infrastructure projects and bilateral trade, providing RMB financing support for numerous landmark cooperative projects. Meanwhile, the bank advocates for RMB-denominated pricing and settlement in commodity trading, achieving breakthroughs in transactions involving iron ore, pulp and other bulk commodities.

E-CNY business

Currently, the e-CNY, or digital yuan, is attracting global attention. Unrestricted by geographical limitations, it holds distinct advantages in the field of cross-border payments.

Since late 2017, BOC has been involved in the research and development of the e-CNY, with various business indicators ranked among the leading level in the industry. In 2020, assigned by the People's Bank of China and the Hong Kong Monetary Authority, BOC took the lead in launching e-CNY initiatives in Hong Kong. Currently, more than 1,000 retail outlets accept e-CNY payments.

Initiatives like mBridge — a cross-border payment project involving the Chinese mainland, the Hong Kong SAR, Thailand and the United Arab Emirates — are testing the e-CNY for international trade. BOC has participated in the mBridge project since 2022. At present, BOC's head office in Beijing, all domestic branches, BOC (Hong Kong), its subsidiary in Thailand and the Abu Dhabi branch are involved in the project. Since the project's inception, BOC has led in various dimensions such as transaction volume and value, and has provided liquidity support for multiple participating banks within the mBridge system.

"Taking the mBridge as an example, the introduction of central bank digital currency for clearing has streamlined cross-border remittance paths, reduced processing time and costs associated with intermediary banks and lowered clearing risks, thereby enhancing the efficiency of cross-border RMB payments," said a BOC representative.

"From our practice, digital currency has become a hot spot in cooperation between China and other countries, creating new opportunities for RMB internationalization," said a BOC manager.

RMB internationalization is a long-term and complex process, presenting both new challenges and rare development opportunities. As a pioneer in the global expansion of Chinese finance, BOC said it will consolidate the group's global resources, and give full play to its globalization advantages and its role as the main channel for cross-border RMB business expansion, in a bid to promote the development of the offshore RMB market and support the dual-cycle development pattern.