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LCH enables use of offshore CGBs as collateral
08 July 2026 China, UK
Image: Parilov/stock.adobe.com
LCH has announced that it will now accept offshore renminbi-denominated Chinese government bonds (CGBs) as eligible non-cash collateral.
The acceptance of offshore renminbi-denominated CGBs aims to support a more efficient use of balance sheets and liquidity by allowing firms to post high-quality local currency assets.
Under the new structure, offshore Renminbi-denominated CGBs will be accepted on a bilateral basis, with settlement through Euroclear Bank.
The news follows an announcement from LCH in May 2025 in which the clearing house began accepting CGBs denominated in euro and US dollar.
Susi de Verdelon, CEO, LCH, states: “Expanding our collateral eligibility framework to include offshore renminbi-denominated Chinese government bonds is an important step in the evolution of our offering for global members and their customers.
“We look forward to continuing to evolve our capabilities to support them as their participation in central clearing grows.”
Mr Funing Song, general manager of Financial Markets, Bank of China, comments: “China's bond market has grown rapidly, with increased depth, enhanced liquidity, and strong international recognition.
“This provides a solid foundation for the further global deployment of renminbi-denominated assets, offering diversity and relatively stable options that support effective risk management, enable sustainable long-term returns, and contribute to global financial stability.”
China’s bond market, the second highest in the world at US$28 trillion, accounts for 15–20 per cent of the entire global bond market, and continues to expand its accessibility to international investors.
Cheuk Wong, head of Macro Trading, Asia, and head of Markets and Securities Services, Hong Kong, HSBC, adds: “We’re proud to be among the first clearing brokers to support offshore renminbi-denominated Chinese government bonds as collateral at LCH.
“This is an important step in strengthening the cleared derivatives market and supporting the continued internationalisation of renminbi markets.”
The acceptance of offshore renminbi-denominated CGBs aims to support a more efficient use of balance sheets and liquidity by allowing firms to post high-quality local currency assets.
Under the new structure, offshore Renminbi-denominated CGBs will be accepted on a bilateral basis, with settlement through Euroclear Bank.
The news follows an announcement from LCH in May 2025 in which the clearing house began accepting CGBs denominated in euro and US dollar.
Susi de Verdelon, CEO, LCH, states: “Expanding our collateral eligibility framework to include offshore renminbi-denominated Chinese government bonds is an important step in the evolution of our offering for global members and their customers.
“We look forward to continuing to evolve our capabilities to support them as their participation in central clearing grows.”
Mr Funing Song, general manager of Financial Markets, Bank of China, comments: “China's bond market has grown rapidly, with increased depth, enhanced liquidity, and strong international recognition.
“This provides a solid foundation for the further global deployment of renminbi-denominated assets, offering diversity and relatively stable options that support effective risk management, enable sustainable long-term returns, and contribute to global financial stability.”
China’s bond market, the second highest in the world at US$28 trillion, accounts for 15–20 per cent of the entire global bond market, and continues to expand its accessibility to international investors.
Cheuk Wong, head of Macro Trading, Asia, and head of Markets and Securities Services, Hong Kong, HSBC, adds: “We’re proud to be among the first clearing brokers to support offshore renminbi-denominated Chinese government bonds as collateral at LCH.
“This is an important step in strengthening the cleared derivatives market and supporting the continued internationalisation of renminbi markets.”
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