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Daisy Wu

The London Clearing House (LCH) has begun accepting offshore yuan-denominated Chinese government bonds as eligible non-cash collateral, marking a structural milestone in Beijing’s decade-long push to internationalise its currency and integrate its debt into global financial pipelines.
The decision by LCH – a major derivatives clearing house owned by the London Stock Exchange Group – allows investors to use offshore yuan sovereign bonds, also known as dim sum bonds, to meet margin requirements.
The move comes amid a growing appetite for yuan assets, driven by China’s expanding multitrillion-dollar domestic bonds market, the world’s second largest.
Bank of China, the nation’s most internationally active lender, led the roll-out. It said three of its overseas units – its locally incorporated subsidiary BOC Hong Kong and the parent company’s London and Hong Kong branches – executed the first transactions using offshore bonds as collateral on July 7.
BOC Hong Kong also facilitated several institutional clients’ depositing of the bonds, which were settled through Euroclear Bank.
Historically, foreign investors faced hurdles utilising yuan assets in Western clearing houses due to a strict collateral framework that favoured US Treasuries and European bonds.
LCH accepted euro- and US dollar-denominated Chinese sovereign bonds in May last year, and its inclusion of yuan-denominated debt deepens the integration of Chinese assets into the global post-trade ecosystem.
As the sole Chinese clearing bank for LCH, BOC’s London branch previously established a dedicated yuan clearing account and held direct participant status in both China’s Cross-border Interbank Payment System and the United Kingdom’s Clearing House Automated Payment System, bridging Western capital and the offshore yuan ecosystem.
“This milestone deepens the integration of Chinese assets into the international financial infrastructure,” Patrick Wu, head of macro and co-head of trading for Asia-Pacific and the Middle East at Credit Agricole CIB, said in an announcement issued by the London Stock Exchange Group.
The initiative represented an important evolution in the way Asia-Pacific markets connected with global risk management and post-trade infrastructure, he added.


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Bank of China led the roll-out of the yuan-denominated assets, with three of its overseas units executing the first transactions


Bank of China led the roll-out of the yuan-denominated assets, with three of its overseas units executing the first transactions.


Appetite for yuan assets sees London Clearing House accept dim sum bonds as collateral

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Bank of China led the roll-out of the yuan-denominated assets, with three of its overseas units executing the first transactions

Bank of China led the roll-out of the yuan-denominated assets, with three of its overseas units executing the first transactions