LCH: RMB to Surpass Yen as Second Largest USD-Linked Options Currency Globally

The RMB's status in the global FX options market is accelerating upward. London Clearing House (LCH) predicts that the USD/Offshore RMB pair could surpass USD/JPY by 2028 to become the second-largest traded currency pair in the global FX options market, trailing only USD/EUR. Andrew Batchelor, Head of ForexClear at LCH's FX clearing division, stated in an interview that this ranking shift will be confirmed in the Bank for International Settlements' (BIS) next triennial survey on FX and OTC derivatives markets scheduled for 2028. He also noted that all banks with significant trading activity in EUR/USD or USD/JPY FX options would welcome the ability to clear USD/Offshore RMB options through LCH. Data Confirms Accelerating Catch-Up: RMB Options Volume Chasing Yen Latest BIS survey data clearly illustrates the narrowing gap between the RMB and the yen. According to last year's report, the average daily trading volume of RMB FX options stood at $82 billion, compared to $102 billion for the yen, while the euro reached a high of $236 billion. From a broader perspective, the RMB's share in global currency transactions covering spot, forward, swap, and options has risen to 8.5%, a significant increase from 7% in 2022. In comparison, the dollar accounts for 89%, the euro 28.9%, the yen 16.8%, and the pound 10.2%. Andrew Batchelor pointed out that multiple factors drive the growth in RMB usage: the expansion of real economy trade and cross-border capital flows, rising demand for risk management in international markets, and the increasing participation of non-bank institutions seeking trading opportunities. Chinese Government Bonds: LCH Pioneering the Next Frontier of Collateral Uncertainties stemming from Middle East conflicts and US policy are simultaneously elevating the international usage of both the dollar and the RMB. According to SWIFT, a global financial messaging service, the dollar's share in international transactions rose to a record high of 51.1% in March this year; meanwhile, China's Cross-Border Interbank Payment System (CIPS) recorded a single-day transaction volume at a historic peak in early April. At the same time, LCH's RMB strategy extends beyond FX options clearing to the global application of Chinese government bonds as collateral. According to Andrew Batchelor, LCH has already utilized EuroClear in 2025 to include offshore Chinese bonds denominated in euros and dollars within the scope of eligible non-cash collateral. Next, LCH plans to incorporate offshore RMB-denominated Chinese government bonds into its collateral system as early as the third quarter of 2026. Subsequently, the clearing house will consider introducing settlement services for offshore RMB Chinese government bonds via its Hong Kong partner, CMU OmniClear. Andrew Batchelor stated that Chinese government bonds hold immense potential as global collateral. Chinese banks hold substantial amounts of these assets and are increasingly externalizing their holdings to diversify portfolios, laying the foundation for their widespread use within the international clearing system.