NEW YORK, Feb. 14 (Xinhua) -- Authorizing J.P. Morgan Chase Bank to provide RMB clearing services in the United States is a significant step forward in the internationalization of the currency, experts have said.
The decision was made to implement the results of the eighth round of the China-U.S. Strategic and Economic Dialogue and in accordance with a memorandum of cooperation signed between the People's Bank of China (PBOC) and the U.S. Federal Reserve Board, said the PBOC in a statement on Tuesday.
"The announcement 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," said Michael Bloomberg, chair of the Working Group on U.S. RMB Trading and Clearing.
"The announcement underscores China's commitment to opening its markets, offering investors and corporations an unprecedented choice for trading, clearing and settling the RMB," said Mary Schapiro, vice-chair of The Working Group on U.S. RMB Trading and Clearing.
"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," said Schapiro.
Bank of China USA viewed the decision more as an opportunity for cooperation than competition. The bank was authorized to provide RMB clearing services in September 2016.
Xu Chen, President & CEO of Bank of China U.S.A., said for the Chinese currency to truly go global, "we need more foreign banks, institutions and corporations to get involved, and PBOC's decision is good news."
He added that as a major U.S. bank, J.P. Morgan Chase could bring its experience in U.S. dollar clearing services to RMB clearing, to better serve U.S. customers.
With greater economic and trade ties between China and the United States, he foresees more demand and huge potential on RMB in the U.S. market this year.
"Stepping up trade cooperation in areas such as energy and agriculture between two countries will lead to more RMB usage," said Xu.
However, the expert said it will be a long process for the currency to be accepted and widely used in the United States.