(Bloomberg) -- JPMorgan Chase & Co.’s designation as a yuan-clearing bank in the U.S. is a “significant step” in making the currency more internationally accepted, according to a group that favors improved access to Chinese markets.
Tuesday’s action by the People’s Bank of China “will support the introduction of more RMB products and services in the United States, improving the competitiveness and efficiency of U.S. businesses by lowering trading costs and increasing access to China’s capital markets,” Michael Bloomberg, chair of the Working Group on U.S. RMB Trading and Clearing and founder of Bloomberg LP, said in a statement.
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JPMorgan, the biggest U.S. bank by assets, is the first non-Chinese lender designated for such a role globally. Bank of China Ltd.’s New York branch already clears renminbi -- or RMB -- payments in the U.S., while other Chinese lenders do so in a number of countries.
The establishment of a second yuan-clearing bank in the U.S. was among recommendations the working group issued in 2016. The group was formed following a 2015 summit between former U.S. President Barack Obama and Chinese President Xi Jinping, where they agreed to a joint mandate to explore new ways to facilitate trading of the currency.
The decision “underscores China’s commitment to opening its markets,” Mary Schapiro, former head of the Securities and Exchange Commission and the working group’s vice chair, said in the statement. “The designation of two clearing banks in a market as expansive and deep as the United States will further the internationalization of the RMB around the globe.”
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