Industrial and Commercial Bank of China (ICBC) has issued the first renminbi-denominated certificate of deposit (CD) that will be settled in the US, in a move that allows more borrowers to issue in the US securities in the Chinese currency.

 

The fixed rate CD is valued at 500 million yuan with a 31-day maturity. It is the first renminbi-denominated financial product eligible to be settled through The Depository Trust Company, a wholly owned subsidiary of The Depository Trust & Clearing Corp (DTCC). Previous issuances of renminbi-denominated CDs by New York branches of Chinese banks were settled through Euroclear in Europe. The transaction is expected to strengthen business ties between the two countries.

 

BNY Mellon Corporate Trust is the issuing and paying agent on the CD. ICBC, the largest bank in the world by total assets, issued the CD through its New York branch.

 

“The launch represents a significant milestone in serving to meet the growing demands among investors in the United States and around the world to have access to the renminbi,” said ICBC chairman Jiang Jianqing. “The renminbi is an increasingly important part of the global payments system, as payments in this currency are growing faster than overall global payments in all currencies.”

 

The value of renminbi payments increased 18.46% from February 2016 to March 2016, compared with a 10.67% increase in all payments currencies during the same period, according to Swift. In March, Swift reported that the reminbi was the fifth most active currency for global payments by value with a share of 1.88%, a slight increase from 1.74% in February 2016.