Jiang Jianqing, chairman of ICBC, at an issuance ceremony for the bank's first renminbi-denominated certificate of deposit with former New York City Mayor Michael Bloomberg. AMY HE / CHINA DAILY

Industrial and Commercial Bank of China (ICBC) has issued its first renminbi-denominated certificate of deposit, allowing institutions to issue and clear financial products denominated in the Chinese currency in the US.

The CD allows borrowers to issue RMB-denominated securities in the US for trading and settlement purposes.

“The launch presents a significant milestone in serving to meet the growing demands among investors in the United States and around the world to have access to the RMB,” said Jiang Jianqing, chairman of ICBC, in a May 20 statement.

“The RMB is an increasingly important part of the global payments system, as payments in this currency are growing faster than overall global payments in all currencies,” he added.

Between February and March, the value of RMB payments increased 18.5 percent. compared to a 10.7 percent increase in payments of other currencies, according to the Society for Worldwide Interbank Financial Telecommunication (SWIFT). The RMB is the fifth-most active currency in global payments, it said.

BNY Mellon Corporate Trust is the issuer and paying agent of the CD, which is valued at 500 million yuan ($76.3 million). It has a 31-day maturity and is the first RMB-denominated financial product settled by the Depository Trust Company. Previous RMB-denominated CDs were settled by Euroclear in Europe.

"Our corporate trust team looks forward to its future collaboration with ICBC and DTCC (Depository Trust and Clearing Corp) and providing its solutions for trading, clearing and settlement of RMB in the US," said Brian Shea, CEO of investment services at BNY Mellon.

"This innovation paves the way for us to further develop connections into major RMB trading and clearing centers across the world,” he said.

ICBC and BNY Mellon are members of the Working Group on US RMB Trading and Clearing, which promotes trading, clearing and settlement of the Chinese currency in the US. The group is chaired by former New York City Mayor Michael Bloomberg, who attended the issuance ceremony.

Bloomberg said that it’s important that US firms can easily use Chinese currency.

“Being able to clear RMB here will lower costs for firms that want to do business, make our financial centers more competitive globally, and strengthen US and China’s relationships. All of that will help growth on both sides of the Pacific,” he said.