The Renminbi is rapidly ascending in the global foreign exchange options market. LCH has forecast that the USD/CNH currency pair is expected to surpass USD/JPY by 2028, becoming the second most traded pair in the global FX options market, second only to EUR/USD.
Andrew Batchelor, head of LCH's ForexClear division, stated in an interview that this shift in ranking will be reflected in the Bank for International Settlements' next Triennial Central Bank Survey of foreign exchange and OTC derivatives markets in 2028. He also noted that all major banks with significant trading volumes in EUR/USD or USD/JPY FX options would welcome the ability to clear USD/CNH options through LCH.
Data confirms that CNY options trading volume is accelerating to catch up with the Japanese Yen. The latest BIS survey clearly shows the narrowing gap. According to last year's report, the average daily trading volume for CNY FX options was $82 billion, compared to $102 billion for JPY and $236 billion for EUR.
From a broader perspective, the Renminbi's share of global currency transactions—including spot, forward, swap, and options—has risen to 8.5%, up significantly from 7% in 2022. By comparison, the USD accounts for 89%, the EUR 28.9%, the JPY 16.8%, and the GBP 10.2%.
Andrew Batchelor highlighted that multiple factors are driving the increased use of the Renminbi: the expansion of real-economy trade and cross-border capital flows, rising international risk management needs, and growing participation from non-bank institutions seeking trading opportunities.
Meanwhile, geopolitical tensions in the Middle East and policy uncertainty in the United States are concurrently boosting the international use of both the US Dollar and the Renminbi. According to data from SWIFT, the USD's share in international transactions reached a record high of 51.1% in March. At the same time, China's Cross-Border Interbank Payment System (CIPS) also recorded a historic high in daily transaction volume in early April.
LCH's strategy for the Renminbi extends beyond FX options clearing and includes the global use of Chinese government bonds as collateral. Andrew Batchelor mentioned that LCH has already accepted Chinese offshore bonds denominated in EUR and USD as eligible non-cash collateral since 2025, via Euroclear.
The next step for LCH is to include Chinese government bonds denominated in offshore Renminbi into its collateral system as early as the third quarter of 2026. Subsequently, the clearing house will also consider introducing settlement services for offshore CNY Chinese government bonds through its Hong Kong partner, CMU OmniClear.
Andrew Batchelor emphasized the significant potential of Chinese government bonds as global collateral. Chinese banks hold large amounts of these assets and are increasingly externalizing their holdings for portfolio diversification, laying the foundation for their broader use in the international clearing system.
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