The People’s Bank of China has appointed Deutsche Bank as the RMB clearing bank in Frankfurt, making Germany the second country in the euro area to have such infrastructure after the Bank of China’s branch since 2014. This appointment marks a notable escalation in China’s decade-long effort to build offshore yuan infrastructure across the European continent. Deutsche Bank has already participated in China’s Cross-Border Interbank Payment System CIPS since 2015, China’s rival to SWIFT. For SMEs and multinationals doing business with China, this new clearing capacity should accelerate transaction times and potentially reduce costs for cross-border payments in yuan. The real impact of this appointment will depend on how quickly Deutsche Bank ramps up its clearing operations and whether it leads to a measurable increase in yuan usage in European trade.
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