OREANDA-NEWS. January 02, 2014. Lately, Bank of China and the Tianjin Bohai Commodity Exchange ("BOCE") jointly launched the spot commodity cross-border RMB settlement business, which can greatly facilitate RMB's performance of valuation and trading functions as an international currency in the global bulk commodity market, and accelerate RMB internationalization.

Spot commodity cross-border RMB settlement business means that by relying on the electronic system of the spot commodity trading platform, the buyer and the seller (one of which is an overseas entity) of spot commodities complete the trading process from pricing to settlement and goods delivery using RMB as the valuation and settlement currency, which can also generate authentic and authoritative bulk commodity price. Recently, BOC and BOCE successfully completed the first spot commodity cross-border RMB settlement transaction on a trial basis. Both sides will continue to proceed with interconnection of business systems, sharing of customer resources and formulation of relevant operational rules so as to further expand business scale and enhance processing efficiency.

BOC has long dominated the cross-border RMB business market. In the first 11 months of 2013, BOC Group handled cross-border RMB settlement transactions of RMB3.56 trillion in total, representing a year-on-year increase of 58%, among which BOC domestic branches accounted for RMB1.6 trillion, maintaining a market share of around 30%. Up to now, BOC has opened over 1000 RMB clearing accounts for foreign banks, forming cross-region and cross-time-zone clearing capabilities worldwide. This has made BOC the exclusive RMB clearing bank in Hong Kong, Macau, Taiwan , Malaysia and Cambodia, also the first local RMB clearing bank recognized by the government of Luxembourg, serving as a major channel for cross-border and overseas RMB business worldwide.