Research On The Development Of RMB Cross - Border Settlement

After the global financial crisis broke out in2008, the shortcomings of theInternational Monetary System became increasingly obvious, andRMB internationalization attracted much attention. The cross border RMB settlementis the first step towards RMB internationalization. Since the launch of thepilot scheme for cross-border trade settlement in RMB in2009, the relevant businesshave developed rapidly. On one hand, it had a positive impact on China’s economy,promoting the business of foreign trade enterprises and commercial banks of China,accelerating the process of the internationalization of the RMB, and reducing thegrowth rate of China’s foreign exchange reserves; on the other hand, it also had somenegative impacts. For instance, it weakened the effects of monetary policy, increasedthe difficulty of macroeconomic regulation and control, and raised the risk of financialregulatory.Although cross-border RMB settlement has developed rapidly, it is still in thegradual development and exploration phase given its short history. The experiences ofworld major currencies such as US dollar and Japanese yen acting as settlementcurrency can be used for reference. The continuous improvement of the economic,trade and investment status of China, the rapid development of the offshore market ofthe RMB, as well as the continuous deepening of bilateral monetary cooperationbetween governments, all have created conditions for China to further promotecross-border RMB settlement. Since its implementation5years ago, cross-borderRMB settlement has gradually gained wide acceptance and recognition by the globalmarket. In the next stage, further promotion of relevant business can be achieved bystrengthening international pricing function and accelerating the opening up of capitalprojects. The RMB is expected to become a major global settlement, payment,transaction and reserve currency in15to20years.