SWIFT Tracker Underscores Continued Decline in RMB Usage in 2018

SWIFT has released the latest data report from its renminbi (RMB) tracker, outlining a monthly snapshot of the currency’s usage. The data reveals a continued decline of the RMB in terms of domestic and international Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term by value, falling two positions in the global rankings.

Following a period of strong growth over the past two years, the RMB has found itself somewhat on the back foot in terms of its adoption. As of February 2018, the RMB was the seventh highest utilized currency, falling from fifth place just two years ago. Since then the Swiss franc and Canadian dollar have overtaken the RMB for domestic and international payments.

Presently, the RMB retains a global share of 1.56 percent, its lowest level in two years. Ahead of the RMB, the top six currencies by value are the USD (38.0 percent), euro (34.29 percent), GBP (7.34 percent), JPY (3.29 percent), CHF (1.64 percent), and CAD (1.57 percent).

The RMB’s decline has coincided with a few factors, namely the rise of Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term in Asia. While this is not necessarily the cause of its retreat in global usage, its waning influence over the past year has taken place in tandem with an adoption of cryptocurrencies.

While one year is too short a sample size to accurately predict future movement, it will be interesting to monitor this trend going forward. It is unknown if a pronounced growth in crypto usage will influence or erode the RMB’s usage.

Another factor that contributed to the decline in the RMB’s usage was the seasonal effect of the Chinese New Year, having taken place in February. On a month-over-month basis, the value of RMB payments also pointed lower, falling by 18.3 percent compared to January 2018. Of note, all payment currencies declined by a figure of 12.7 percent month-over-month, meaning the RMB’s decline was more apparent.