China inks deal on RMB clearing services in 3 European cities

Due to impressive advantages in the areas.

Renminbi payments in Europe are set to accelerate, due to a number of clearing services that have been established in the continent.

According to the research report entitled "Offshore Renminbi – A summer lull for the RGI" from Standard Chartered, Renminbi clearing banks were appointed in Frankfurt and London in June.

The announcement of clearing banks in Frankfurt and London has significant advantages, according to the report.

Additionally, China signed MoUs with Paris, Luxembourg and Seoul to set up clearing services for Renminbi trading.

Meanwhile, Standard Chartered said the UK is the clear outperformer in terms of cross-border Renminbi-denominated SWIFT flows, while four other European centres (France, Germany, the Netherlands and Luxembourg) are among the top 10 centres for Renminbi-denominated flows to China and Hong Kong.

Here's more from Standard Chartered:

Financial institutions make up a significant portion of Renminbi-denominated flows through London. This is evident in London’s position as the biggest centre for offshore CNY trading after Hong Kong, owing to its status as a global financial hub.

While financial flows through Germany are smaller than those through London and France, the share of corporate flows is significantly higher.

In addition, corporate flows through Germany have risen significantly recently. Germany is China’s biggest European trading partner and its fifth-biggest trading partner overall, and this trade relationship could accelerate corporate flows.

The announcement of a Renminbi clearing bank in Frankfurt and London will expedite the adoption of the Renminbi as a trade-settlement currency in the region.

Companies that already use Renminbi-denominated services, or that are seeking such services, will enjoy direct domestic access to Renminbi clearing and liquidity.

In addition, these centres can provide domestic Renminbi clearance services outside of the Asian time zone.