The People’s Bank of China announced the mandate in a statement on its website Wednesday. The appointment was made in conjunction with the U.S. Federal Reserve, according to the PBOC statement.
“This is an important step in building the global infrastructure, as the yuan clearing system now covers 24 hours,” said Xia Le, chief economist for Asia at Banco Bilbao Vizcaya Argentaria SA in Hong Kong.
People’s Bank of China Deputy Governor Yi Gang said in June that a U.S. yuan clearing bank was planned.
The Chinese government has named yuan clearing banks in 21 overseas cities and countries as part of a drive to promote the use of the currency for transactions worldwide. The yuan ranked fifth as a global payments currency in July, according to Society for Worldwide Interbank Financial Telecommunications. The currency’s share of global transactions shrank in June to the lowest since 2014.
Bank of China has received the most yuan clearing mandates of China’s banks with 11 including Hong Kong, Macau, Sydney, Paris and Taipei. Industrial and Commercial Bank of China Ltd., the nation’s largest bank, serves Singapore, Doha, Toronto and Luxembourg. China Construction Bank Corp. was named for London and Zurich, while Bank of Communications Co. was given Seoul.
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