China Sets Sights On Cross-Border Payments

China is no stranger to international commerce, with a long history of overseas business among its manufacturers and domestic digital commerce companies promoting their services for buyers outside national borders. But the nation has struggled more so with adopting the yuan into these transactions.

In its most recent strategy, the nation is now looking to strengthen cross-border payments by supporting financial services for both domestic and overseas institutions that operate with Chinese currency. According to reports, the People’s Bank of China announced Thursday (June 11) that it will support the expansion of cross-border finance for enterprise in an aim to boost the yuan’s international standing.

The plan encourages international institutions to issue bonds in yuan, reports said, allowing Chinese companies to raise funds in their own currency offshore. Officials are also reportedly planning to lower barriers to entry into its interbank bond market for overseas entities. Similarly, the central bank is also planning to relax restrictions on domestic institutions’ ability to issue bonds in yuan overseas, without the requirement to seek approval from the National Development and Reform Commission.

Part of this venture, dubbed the China International Payment System, would be to seek inclusion of the yuan in the International Monetary Fund’s Special Drawing Rights.

“China will continue to facilitate renminbi internationalization by removing unnecessary policy parries and providing necessary infrastructure,” the People’s Bank of China reportedly stated.

Officials said the first phase of the China International Payment System would be completed by the end of the year and aims to strengthen trade settlement and investments in the yuan currency.

Reports of China’s cross-border payments push came the same day that Hong Kong-based PayEase, the nation’s top e-payment service provider, announced that it was awarded the “2014–2015 Most Popular Cross-Border Payment Enterprise” at an event held by several official groups, including the Ministry of Commerce Bureau of Foreign Trade Development Affairs.