The Bank for International Settlements has published a working paper based on the 2025 Triennial Survey of global foreign exchange turnover that finds financial links with China are the main drivers of renminbi internationalisation, more so than trade-related factors. The study concludes that cross-border banking links explain much of the short-term growth in RMB trading between 2022 and 2025, while longer-run RMB turnover across jurisdictions is even more strongly associated with policy-linked financial variables such as qualified investor licences, although bilateral trade and other real-economy links also matter. In the short term, the paper finds that market-driven convergence in RMB trading remains in place but is slower than previously reported once the outlier effects of Hong Kong SAR and Singapore are taken into account, with both centres showing distinct dynamics led mainly by FX swap trading. Over the longer run, banking links with China, qualified investor licences, historical RQFII quotas and clearing-bank arrangements explain far more of the geographical distribution of RMB trading than trade variables. The paper estimates that a 1% rise in cross-border bank claims and liabilities vis-à-vis China is associated with 0.72% higher RMB turnover, and that 10 additional qualified investor licences are associated with about 1% higher RMB turnover. It also finds that trade effects are stronger for cross-border and spot RMB trading, while FX swaps are mainly linked to financial and hedging-related activity. The BIS notes that the views expressed are those of the authors and do not necessarily reflect those of the BIS or its member central banks.
Bank for International Settlements 2026-04-29
Bank for International Settlements working paper finds financial links and qualified investor licences are key drivers of RMB internationalisation
The Bank for International Settlements has published a working paper using data from the 2025 Triennial Survey of global foreign exchange turnover which finds that financial links with China, rather than trade-related factors, are the main drivers of renminbi internationalisation. The study shows that cross-border banking links and policy-linked financial variables such as qualified investor licences and clearing-bank arrangements explain most of the growth and geographical distribution of renminbi trading, with trade effects more pronounced in cross-border and spot markets than in foreign exchange swaps.