Appetite for yuan assets sees London Clearing House accept dim sum bonds as collateral
Bank of China led roll-out, with three of its overseas units executing first transactions
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, or 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.
Historically, foreign investors faced hurdles utilising yuan assets in Western clearing houses due to a strict collateral framework that favoured United States Treasuries and European bonds.