Relevant data shows that the average daily trading volume of RMB foreign exchange options has reached 82 billion US dollars, accelerating to catch up with the yen's 102 billion US dollars. Currently, the uncertainty of the Middle East conflict and U.S. policies is simultaneously pushing up the international usage of both the US dollar and the RMB. At the same time, the London Clearing House (LCH) also plans to include offshore RMB-denominated Chinese government bonds into the global collateral system, sending an increasingly strong signal of accelerating RMB internationalization.
The RMB's position in the global foreign exchange options market is accelerating. The London Clearing House (LCH) clearly predicts that the USD/Offshore RMB currency pair is expected to surpass USD/JPY in 2028 to become the world's second-largest traded currency pair in the global foreign exchange options market, second only to EUR/USD.
Andrew Batchelor, Head of ForexClear, the foreign exchange clearing division of LCH, said in an interview that this ranking change will be confirmed in the Bank for International Settlements (BIS) next triennial survey of the foreign exchange and over-the-counter derivatives markets in 2028. He also pointed out that all banks with large volumes of transactions in EUR/USD or USD/JPY foreign exchange options will welcome the ability to clear USD/Offshore RMB options through LCH.
Data Confirms: RMB Options Trading Volume Accelerates to Catch Up with Yen
The latest survey data from the Bank for International Settlements (BIS) clearly shows the narrowing gap between the RMB and the yen in foreign exchange options trading volume.
According to the survey report released last year, the average daily trading volume of RMB foreign exchange options was 82 billion US dollars, the yen was 102 billion US dollars, and the euro was as high as 236 billion US dollars, still the currency with the highest trading volume in the global foreign exchange options market.
From a more macro perspective, the RMB's share in global currency transactions, including spot, forward, swap and options, has risen to 8.5%, a significant increase from 7% in 2022, demonstrating the continuous expansion of the RMB's international usage. In contrast, the US dollar accounts for 89% of global currency transactions, the euro 28.9%, the yen 16.8%, and the British pound 10.2%, with the US dollar still occupying an absolute dominant position.
Andrew Batchelor pointed out that the factors driving the growth of the RMB's international usage are diverse: the continuous expansion of trade and cross-border capital flows in the real economy, the rising demand for RMB-related risk management in the international market, and the gradual entry of more non-bank institutions seeking trading opportunities into the RMB trading market.
Chinese Government Bonds: LCH's Next Collateral Frontier
Currently, the uncertainty of the Middle East conflict and U.S. policies is simultaneously pushing up the international demand for the US dollar and the RMB, providing a favorable opportunity for RMB internationalization.
According to data from Swift, the global financial messaging service, the US dollar's share in international transactions rose to a record high of 51.1% in March this year; at the same time, China's Cross-Border Interbank Payment System (CIPS) also recorded a record high in single-day trading volume in early April, with the activity of RMB cross-border payments continuing to increase.
It is worth noting that LCH's RMB strategy is not limited to foreign exchange options clearing, but also extends to the global collateral application of Chinese government bonds, continuously increasing its layout in RMB-related businesses.
According to Andrew Batchelor, LCH has included euro and US dollar-denominated offshore Chinese bonds into the scope of eligible non-cash collateral through EuroClear in 2025, laying the foundation for the subsequent expansion of RMB-related collateral businesses.
Next, LCH plans to include offshore RMB-denominated Chinese government bonds into the global collateral system as early as the beginning of the third quarter of 2026. After that, the clearing house will also consider introducing settlement services for offshore RMB-denominated Chinese government bonds through its Hong Kong partner CMU OmniClear, further improving RMB-related financial infrastructure.
Andrew Batchelor said that Chinese government bonds have great potential as global collateral. Chinese banks hold a large number of such assets and are increasingly externalizing their positions to diversify their portfolios, a trend that has laid a solid foundation for the wide use of Chinese government bonds in the international clearing system.
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