Heads of a U.S. working group formed recently to push use of the Chinese currency in the United States have claimed that expanding RMB trading and clearing there will help both the Chinese and U.S. economies.
Mary Schapiro, vice chair of the Working Group on U.S. RMB Trading and Clearing, said in an interview with Xinhua that demand for RMB in the United States is on the rise.
Chinese and U.S. leaders agreed in Washington in September that the two countries should strengthen financial cooperation and facilitate RMB trading and clearing in the United States.
Shortly afterward, former New York mayor and business tycoon Michael Bloomberg led the formation of the working group from senior members of the private sector.
Co-chaired by former U.S. Treasury Secretary Timothy Geithner, former Secretary of the Treasury Henry Paulson, as well as President and CEO of the U.S. Chamber of Commerce Thomas Donohue, the group has 22 members including leading international financial institutions, five Chinese banks and the U.S. Chamber of Commerce.
"Having trading and clearing of the RMB in the United States will enhance the competitiveness of U.S. companies, lower transaction costs and increase efficiency," Schapiro told Xinhua.
"It can help them build stronger trading relationships and business partnerships with China and should encourage more bilateral trade and investment."
The working group has surveyed U.S. companies and traders on current and potential RMB demand and released initial observations in early April.
"Right now, the demand for RMB in the United States is not as high as we expected, but we think there is tremendous potential for demand to increase," Schapiro said.
In January, the RMB remained the fifth most active currency for global payments by value and accounted for 2.45 percent of global payments, a slight increase from 2.31 percent in December 2015, according to data from the Society for Worldwide Interbank Financial Telecommunication, a global financial data provider.
Kevin Sheekey, chairman of external relations for Bloomberg L.P., told Xinhua that the U.S. market's dollar-centric approach is changing with the RMB becoming more internationalized.
He said the working group is preparing for a multi-currency world which would include the RMB.
"Everyone agrees that the future importance of the RMB is going forward, and thus needs to provide trading centers to convert that," he said.
China has set up offshore RMB trading hubs in Hong Kong, London and Toronto. The U.S. market remains untapped.
"We keep talking about hubs and spokes and wheels, but we are not reinventing the wheel entirely in the United States," Schapiro said. "We hope the experience that China had with different hubs allows us to move more quickly."
She characterized financial institutions in the United States as more diversified than in other locations. That adds complexity to the mechanism.
The working group is aiming to produce a final report to regulators in June that would lay out a road-map for how to strengthen access to RMB in the United States.
China has been aggressively pushing for the yuan's global use, as the Chinese economy is becoming increasingly intertwined with the rest of the world.
In November, the International Monetary Fund approved the inclusion of RMB into the Special Drawing Rights basket, recognizing the RMB's position as an international reserve currency.
Although the RMB has gained more popularity, its activity share remains small compared with the U.S. dollar, the Euro, the British Pound and the Japanese Yen.