by Liu Qiyu

BEIJING, Sept. 13 (China Economic Net) - At the ongoing 2025 China International Fair for Trade in Services (CIFTIS) in Beijing, local currency settlements were highlighted as an area of growing interest. Amid currency volatility and geopolitical uncertainties, many see multi-currency settlement arrangements not only as ways to cut costs but as tools to better manage risk in cross-border trade.

These discussions are not just theoretical. Observers noted that both established and emerging markets are experimenting with settlement mechanisms in local or regional currencies, reflecting practical considerations in trade and finance. These practices are already visible in specific projects and financial institutions, providing practical examples of local currency settlements in action.

One such example is Brunei’s Muara Port, the country’s only public deep-water port, which has been upgraded into a modern logistics hub indecent years. Bank of China, currently the only Chinese bank in Brunei, handles around 80% of the port’s transactions during peak periods. In the Phase I expansion, the bank offered dual-currency financing in RMB and Brunei dollars, helping companies manage currency exposure while supporting the port’s modernization into a comprehensive logistics hub.

A Bank of China source told China Economic Net that as of the end of 2024, the bank operated 543 overseas branches across 64 countries and regions, with more than 80% offering RMB services. In 2024, its cross-border RMB settlements exceeded CNY 43 trillion, including 27 trillion processed through overseas branches, representing a 35% increase over the previous year.

Latin America provides another case. In May 2025, ICBC completed China’s first fully deliverable forward RMB–Brazilian real transaction, enabling direct conversion and providing companies with tools to hedge exchange rate fluctuations. Previously, Chinese firms had limited ability to transact in reais due to Brazilian foreign exchange regulations. “The transaction filled a market gap for small-currency forward hedging and reflects growing demand for tailored settlement solutions in emerging markets,” ICBC staff told CEN.

Tech-driven pilots are also shaping the landscape. Tencent’s pilot of the multilateral central bank digital currency bridge (mBridge) project in June 2024 demonstrated the potential for faster, lower-cost, and secure cross-border clearing. “While still at a pilot stage, mBridge highlights how digital payment infrastructure can support diverse currency usage in global trade,” a project staff member told CEN.

Beyond China, multiple regions are expanding local currency settlements. In BRICS countries, trade increasingly occurs in local currencies, such as the ruble, rand, real, and rupee. Similarly, ASEAN members report growing bilateral settlements in currencies like the Thai baht and Malaysian ringgit. In Africa, the African Export-Import Bank has facilitated transactions in various local currencies to support intra-regional trade. These actions are part of a broader global trend toward using alternative currencies in international trade.

Practical examples, from Muara Port in Brunei, to Brazil’s currency deals, to digital pilots like mBridge, illustrate how local and regional currency arrangements are being integrated into global trade networks, providing greater stability and more reliable frameworks for cross-border business. CIFTIS 2025 underscores that while local currency settlements are not yet the norm everywhere, they are increasingly seen as viable options to enhance efficiency, manage risk, and support smoother trade flows.