Chinese Banks Expand Direct Settlement Currency Coverage to Boost RMB Internationalization
Miles Bennett
At least six Chinese banks have added roughly a dozen new foreign currencies for direct renminbi settlement this year; first-half cross-border RMB settlement jumped 18% to a record 9.83 trillion yuan — renminbi internationalization is moving from policy pledges into everyday bank operations.
What exactly are the banks doing?
At least six commercial banks have added about a dozen new currencies — Thai baht, Brazilian real, Kazakh tenge and others — for direct renminbi settlement this year, mostly emerging-market or Belt-and-Road currencies.
Industrial Bank last month opened cross-border payment, deposit, and financing services in Thai baht and UAE dirham, pitching faster settlement and lower costs.
This means → renminbi internationalization is no longer just central-bank swap agreements; commercial banks are building it into their product shelves for corporate and retail clients.
Why is a bank in Yiwu leading the charge?
Zhejiang Chouzhou Commercial Bank — based in the manufacturing hub of Yiwu — added five currencies this year (Brazilian real, Bangladeshi taka, Turkish lira, among others) and offers direct clearing in six currencies across African markets.
The backdrop: China's exports to Africa are growing at over 20%, yet many African economies face capital controls or dollar shortages.
In plain terms = Yiwu is the hub for China's small-goods exports, and Africa and emerging markets are its core customers. When those markets can't get enough dollars, direct renminbi settlement becomes a practical necessity.
How fast is cross-border settlement growing?
PBOC data show first-half 2026 current-account cross-border RMB settlement reached 9.83 trillion yuan (about $1.46 trillion), up 18% year-on-year.
Second-quarter settlement alone hit 5.31 trillion yuan — an all-time single-quarter record.
This reflects an acceleration in the renminbi's real-trade usage density, not just a financial-account accounting shift.
What is driving this expansion?
Wang Zhiyi, founder of Shanghai Fangchang Information Development, said these bank moves "reveal that renminbi internationalization is increasingly embedded in the actual business operations of Chinese enterprises."
Bosco Wu, strategist at Bank of East Asia, argued that U.S.-China and EU-China trade tensions are pushing China to diversify trading partners — "closer trade ties naturally drive demand for corresponding financial services, including direct currency settlement."
This means → trade friction is paradoxically accelerating RMB settlement expansion — companies' incentive to bypass the dollar system has grown stronger.
Can this continue? Where is the risk?
Lynn Song, chief Greater China economist at ING, said the trend of expanding direct-settlement currency options "looks likely to continue," with economies that have large bilateral trade and investment volumes as the top candidates.
But he noted that whether Chinese banks can genuinely boost direct-transaction volumes ultimately depends on the exchange rates and cost competitiveness they offer.
Public data on small-currency FX settlement volumes remain very limited, making actual business scale hard to assess. Put simply = opening a channel doesn't mean companies will use it — pricing has to be competitive enough.
Content is for reference only, not financial advice.