In March this year, Silva Ânia Transmissora de Energia, a subsidiary of State Grid Brazil Holding, completed its first cross-border RMB financing. Leveraging the RMB cross-border payment and clearing channels, it reduced financial costs and exchange rate risks, and also helped raise Brazilian companies' awareness and acceptance of the RMB. This would have been unimaginable 15 years ago.

In 2009, China launched a pilot program for RMB cross-border trade settlement, which was also the starting point of RMB internationalization. In the words of Zhang Ming, deputy director of the Institute of Finance and Banking at the Chinese Academy of Social Sciences, RMB internationalization has since shown cyclical development and spiral upward characteristics.

"Since 2018, RMB internationalization has gradually become more active and entered a new development cycle," Zhang Ming believes. At present, it is in the rapid development stage of the new cycle. Multiple indicators of RMB internationalization have surpassed the previous cycle's highs, and new breakthroughs have been made in RMB pricing of bulk commodities, development of the onshore financial market, and the digital RMB.

According to the latest data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), in August this year the RMB remained the world's fourth most active payment currency, accounting for 4.69% of total global payments. This is the 10th consecutive month that the RMB has maintained fourth place in global payment rankings.

The China Monetary Policy Report for the second quarter of 2024 shows that at the end of June 2024, under bilateral local currency swap agreements signed between the People's Bank of China and foreign monetary authorities, foreign monetary authorities used an outstanding RMB balance of 104.5 billion yuan, while the PBOC used the equivalent of US$481 million in foreign currency, playing a positive role in promoting bilateral trade and investment.

"RMB internationalization is a business segment that Standard Chartered is very optimistic about," said Lu Jing, president of Standard Chartered Bank (China) Limited. The Standard Chartered Group provides RMB services in 34 markets worldwide. "For example, if a client invests in Indonesia, we can help the client open an RMB account in Indonesia, convert it into local currency at any time as needed, and also issue RMB guarantees and conduct RMB financing."

Where will RMB internationalization go in the future? Guan Tao, global chief economist of BOC International, noted that the important decision adopted at the Third Plenary Session of the 20th CPC Central Committee followed the formulation of the Central Financial Work Conference, emphasizing "steadily and prudently advancing RMB internationalization," which may have two policy implications:

First, it means that RMB internationalization has moved from quantitative expansion to a new stage of quality improvement. More attention should be paid to advancing the cross-border use and holding of the RMB around the strategy of serving national economic development and reform and opening up. This is a natural and inevitable process.

Second, it means that short-term fluctuations in RMB internationalization indicators should be viewed with equanimity. After passing through the initial stage of scale expansion, it is normal for some currency internationalization indicators to show non-linear changes. There is no need to overreact or overinterpret, and one should not set the goal of surpassing or replacing a particular currency at every turn.

E Zhihuan, vice president of the Bank of China Research Institute, said that "steadily and prudently" means continuing to advance RMB internationalization on the basis of upholding the bottom line of financial risks, while "solidly" emphasizes going deep into the real economy to facilitate and promote greater use of the RMB by enterprises in cross-border activities.

"RMB internationalization is a systematic project. In addition to a strong currency, support from factors such as the central bank, financial regulation, international financial centers, financial institutions, and financial talent teams is also indispensable to RMB internationalization," Guan Tao believes. To steadily and prudently advance RMB internationalization, the principles of following the trend, market-driven operation, and mutual benefit and win-win outcomes should be upheld.

Regarding advancing RMB internationalization, Huang Qifan, academic advisor to the China Finance 40 Forum and former mayor of Chongqing, offered recommendations in four areas: continue to promote RMB pricing and RMB settlement in China's cross-border trade; continue to improve services by providing cross-border RMB settlement services for new business forms and models such as cross-border e-commerce; continue to expand opening up and provide more convenient investment and financing services for "bringing in" and "going global"; and accelerate the development of the RMB offshore market, continue to leverage Hong Kong's position as an offshore RMB center, further enrich RMB products, and provide better underlying assets for offshore RMB investment and financing.