RMB Ascends Toward Mainstream Global Reserve Currency Status

The Lujiazui Forum in June has always been a window into China's financial opening-up. On June 17, the 2026 Lujiazui Forum officially opened, with China's top financial regulatory lineup making a collective appearance and unveiling a series of heavyweight financial opening-up policies. These new financial opening measures are designed to resolve the practical challenges that the renminbi faces in going global and coming back in, helping the RMB upgrade from an ordinary settlement currency to a mainstream currency that countries around the world are willing to hold as long-term reserves.

In the current global currency landscape, the U.S. dollar remains the undisputed hegemon, followed by the euro, the British pound, and the Japanese yen, together forming the world's four recognized mainstream reserve currencies. By contrast, while the RMB is widely used and has enormous transaction volumes, its reserve currency status remains low. China's economic size and trade scale rank among the world's top, yet its currency status falls far short of its economic strength.

In recent years, the global landscape has shifted. The Fed's alternatingly loose and tight monetary policy has repeatedly roiled global equity and foreign exchange markets, and together with various geopolitical risks, central banks and overseas institutional investors around the world have increasingly come to realize that they cannot tie all their assets to the U.S. dollar alone; they must diversify to spread risk.

Harvard professor Kenneth Rogoff predicted this year that "within the next five years, the renminbi will officially join the ranks of global mainstream reserve currencies." This judgment is precisely grounded in the broader trend of China's continued opening-up and the increasing stability of RMB-denominated assets.

Previously, the RMB holdings of overseas institutions were almost entirely circulated through offshore hubs such as Hong Kong, China and Singapore. A major problem was unstable supply; moreover, the segmentation between onshore and offshore RMB trading, with non-unified exchange rates and a lack of mature hedging instruments, further dampened foreign investors' willingness to allocate long-term capital.

The three policy packages introduced by the People's Bank of China at this forum have precisely addressed these difficulties, effectively clearing the path for RMB internationalization. The new offshore central bank RMB repo facility essentially builds a liquidity buffer for overseas institutions. Even amid market turbulence, overseas institutions can flexibly manage their RMB holdings and activate them at any time, completely dispelling liquidity concerns and encouraging them to hold RMB bonds for the long term. The pilot offshore RMB foreign exchange trading launched in Shanghai breaks down the trading barrier between onshore and offshore RMB, making the RMB exchange rate more unified and fair, and significantly reducing foreign investors' transaction costs and exchange rate risks. The special action plan for offshore financial services fills institutional gaps, making offshore financial services fully mature and standardized. The three policies combined enable the RMB to achieve a complete offshore cycle spanning allocation, trading, and financing.

At the same time, amid heightened global financial market volatility, Chinese assets have become increasingly favored and serve as a quality safe haven for global capital. That said, one must view this rationally: currency internationalization has always been a slow, meticulous process with no shortcuts. For the RMB to truly secure its position among mainstream global reserve currencies, it is equally a systematic undertaking that cannot be achieved overnight by one or two policy tailwinds. The "strong RMB" strategy currently under discussion within the industry remains centered on patiently building a solid foundation.

On one hand, China must continue to improve its financial markets, fill gaps in financial derivatives instruments, and build a mature risk hedging system. On the other hand, it must continue to expand financial opening-up, optimize foreign investment channels, and ensure that overseas capital dares to enter, is willing to stay, and can earn returns. At the same time, it must rely on a sound domestic real economy and trade advantages to steadily enhance global recognition of the RMB.