NEW YORK — Celent has released a new report titled RMB Internationalization: Integrating the Great Wall with Global Capital Markets. The report was commissioned by the Depository Trust & Clearing Corporation (DTCC) and was written by Arin Ray, an Analyst with Celent’s Securities & Investments practice.
China has made significant progress in its bid to internationalize its currency, the . Several policy and market structure changes implemented by Chinese and other national regulators, as well as by some leading infrastructure providers, are shaping the RMB Internationalization journey.
RMB Internationalization offers numerous benefits to players in capital markets. Investment managers and hedge funds can gain easier and wider access to Chinese assets with high return and better risk management features.
The RMB Internationalization process also has some challenges; for example, rules and practices on issues relating to trading and settlement in China differ significantly from international standards. These issues create operational challenges at a firm level which result in inefficiencies for capital market firms, and hinder faster adoption of the RMB among international participants.
“Developing capabilities to overcome local nuances will likely be operationally difficult and expensive for individual firms,” says Ray. “There is a clear need for more coordinated efforts among market participants at an industry level, and active engagement and coordination with regulatory authorities to resolve them.”
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally experienced analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].