With the support of the China Central Depository & Clearing Co., Ltd. (CCDC), Bank of China completed the market's first variation margin transfer using onshore RMB bonds as collateral on Sept 2.

This marks the first time RMB bonds have been used as eligible collateral in derivative transactions for variation margin transfer, enhancing the liquidity and international recognition of RMB assets.

In recent years, BOC has leveraged its extensive global network and cross-border financial expertise to expand the use of RMB assets as collateral in derivative transactions, thereby promoting the international use of RMB.

Mitigating risks

In the non-centrally cleared market, BOC has actively engaged with major international financial institutions to promote the upgrade of RMB assets from use as a settlement currency to use as high-quality liquid collateral. This upgrade provides market participants with more flexible and efficient risk management tools. In addition, BOC has achieved several key milestones.

In March 2024, BOC, in collaboration with Citibank (China), used RMB cash assets as eligible collateral for variation margin for the first time.

In October 2024, it worked with Crédit Agricole Corporate and Investment Bank to complete the first cross-currency repo transaction using RMB bonds as collateral.

In January 2026, BOC, in partnership with Crédit Agricole Corporate and Investment Bank, included offshore Chinese sovereign bonds in the range of eligible collateral for initial margin for the first time.

Aiding Chinese enterprises going global

In the central clearing space, BOC has closely followed developments at the forefront of international financial infrastructure, promoting the deep integration of offshore RMB assets into global mainstream clearing systems.

In July 2026, on the first day that LCH accepted RMB-denominated offshore Chinese government bonds as eligible collateral, three of BOC's overseas entities — Bank of China (Hong Kong), BOC London Branch, and BOC Hong Kong Branch — completed the first batch of transactions, pioneering the use of RMB-denominated offshore Chinese government bonds in central clearing operations. 

Simultaneously, BOCHK leveraged its strength in cross-border services and clearing agency expertise to assist multiple clients in depositing RMB-denominated offshore Chinese government bond collateral at LCH, facilitating the efficient integration of Chinese-funded institutions into the mainstream clearing ecosystem for international derivatives, reducing the overall funding costs of cross-border transactions.

BOC will continue to leverage its extensive global expertise and comprehensive services to deepen collaboration with international financial institutions on the use of RMB assets as collateral. It aims to enrich the application of RMB assets in cross-border investment, financing, and risk management as well as advance the international use of RMB and high-standard financial opening-up.