Canadian firms have been slow to adopt RMB for cross-border payments, according to SWIFT’s latest RMB tracker.

Since November 2014, when the RMB offshore clearing centre opened in Toronto, traffic between Canada and China/Hong Kong has increased despite the fact that the Canadian dollar is most preferred.

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Moreover, 70% of cross-border payments, by value, sent between Canada and China/Hong Kong are made using the Canadian dollar, followed by the RMB at 15% with the U.S. dollar accounting for only 1%.

Though RMB usage for payments is low, SWIFT’s data shows that RMB traffic between Canada and China/Hong Kong has grown by 67% since the opening of the RMB offshore clearing centre in November 2014.

Key takeaways from SWIFT include:

  • The US doallar ranks number one as a world payments currency with 39.79% share by value; and
  • 7% of RMB payments by value, initiated in the US and Canada and ending in China/Hong Kong are cleared in Hong Kong.

Data from the report also suggest that here is no significant correlation between the size of a country’s economy and the usage of its currency for international payments and clearing.

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For example, the US accounts for about 25% of global GDP and the US dollar has an activity share of 39.79%. While China accounts for 15% of global GDP, the RMB is used for less than 2% of international payments.

Based on recent data, the gap between the global usage of the USD and RMB is unlikely to be sustainable, particularly as the Chinese economy continues to grow and develop broader capabilities for internationalisation of the RMB.

Michael Moon, Head of Payments Markets, APAC adds, “Although the world remains highly dollarised, the growing prominence of the Chinese economy supports a case for greater RMB usage internationally. Liberalisation of capital markets in China, and initiatives such as the Belt and Road – over time, will contribute to further RMB globalisation.”