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LME to accept yuan as collateral in bid to win more Chinese business

Highlights

The London Metal Exchange's clearing house, LME Clear, is now accepting offshore yuan as eligible cash collateral, effective immediately, in a move to capture more Chinese business, the company said in a statement Tuesday.

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The news comes on the back of regulatory approval for the initiative from the Bank of England.

The yuan is seeing rapid adoption internationally.

According to Swift data, the Chinese currency is already one of the top-five global payment currencies.


"This is an important development for the LME and LME Clear, and it highlights the stronger ties and synergy between Hong Kong and London since the LME became part of the HKEx Group," Charles Li, chief executive of Hong Kong Exchanges and Clearing, the LME's parent company.

"The yuan is on its way to becoming one of the world's most widely used currencies, and we are pleased to be able to help our members take advantage of the opportunities arising from the yuan's internationalization," LME Clear CEO Trevor Spanner said.

The move is in reaction to market demand, according to the LME.

Chinese-owned BOCI Global Commodities will be the first LME Clear member to submit yuan collateral.

BOCI was LME Clear's first Chinese member, and parent company Bank of China will be its first Chinese settlement bank with yuan capability.

--Ben Kilbey, ben.kilbey@platts.com
--Edited by Jonathan Dart, jonathan.dart@platts.com