Diversification driving up RMB adoption

The US dollar remains the world’s premier currency for investment, payments, and reserves, and few expect that to change in our lifetimes.

Yet diversification is a clear trend, expressed in demand for alternative currencies, in enthusiasm for virtual assets and gold, and for the renminbi (RMB), the currency of the world’s largest trading economy.

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David Liao, Co-CEO for Asia and Middle East, HSBC

RMB’s global usage is well out of proportion to China’s economic heft, and we do see that changing.

To explore how the role of RMB is evolving, FinanceAsia conducted an independent survey of more than 120 institutions in 12 markets as part of our report, Renminbi Shift: From Potential to Practicality.

Most respondents (66%) said diversification benefits was the top reason for allocating RMB assets, placing it ahead of mainland China’s role in global trade / investment (54%) and yield opportunities (40%).

Rising use of RMB in finance

We see rising use of RMB in finance. Our data show increased overseas lending in RMB and increased borrowing through issuance of yuan-denominated ‘dim sum’ and ‘panda’ bonds.

In payments, China’s cross-border system has seen transactions jump in 2026; roughly one-third of the Chinese mainland’s trade is now settled in its own currency.

Hong Kong, home to the world’s most active offshore RMB market, continues to deepen connectivity and liquidity, with new channels for overseas lending in yuan.

Innovation, including the exploration of an interoperable digital yuan (the ‘e-CNY’), will accelerate what market forces have already set in motion.

Controlled pace of reform

But the global investment community must keep a few principles in mind. The process of building offshore markets for yuan-denominated assets and transactions is not solely to benefit professional investors – liberalisations must serve the interests of all Chinese people.

That means expanding usage in ways that help Chinese companies and Chinese people transact more easily with the rest of the world in their own currency, without provoking instability.

This demands a controlled pace of reform that does not inadvertently pull China and its trading partners into a new environment that is less reliable than the current one – replacing an imperfect but manageable construct with something less reliable and more expensive.

HSBC’s ambition is to be an agent of trust. We believe in building a more efficient, transparent and reliable financial system that serves the global good – with the RMB as part of the foundation.