The Rmb became the world’s 15th trade settlement currency in July 2012, overtaking the South African rand, a Swift report reveals.

The Chinese currency reached a 0.45% market share, compared to 0.44% for the rand. The Rmb is also getting closer to the Danish krone, which stands at 0.47% of market share.

According to Swift, 20% of the 158 countries that had payments with China and Hong Kong in July 2012 conducted at least 10% of their transactions in Rmb, with GCC countries, Singapore and the UK taking the lead.

However, adoption of Rmb payment by the US, Japan and Australia remains low, Swift adds.

Standard Chartered’s head of production management, east, transaction banking, Michael Vrontamitis, explains that although the process is taking longer in these countries, governments are still showing a desire to increase Rmb invoicing.

“The governments of Japan and Australia are making early moves at encouraging the use of Rmb in trade settlement in their markets. Japan signed an MOU with China last December and Australia has been in the press recently with the deputy prime minister’s trip to Hong Kong in July 2012. Companies in these two countries are beginning to look more closely at Rmb settlement and we are seeing some encouraging signs of movement. For example we have seen some major Japanese companies starting to shift or tendering for the shift of their invoicing into Rmb.

“For companies in the US with US shareholders it will take more time, as corporate treasurers evaluate the impact of invoicing in Rmb on shareholder value. There may be more impact on systems and processes for US companies than those in other parts of the world in order to take advantage of the additional control over foreign exchange and interest rate risks and the respective benefits this brings vis-a-vis the required change in systems and processes,” he tells GTR.

The Rmb gained three places and 0.15% market share between July 2011 and 2012. To become one of the top five payment currencies, it would need to reach a 2% market share. Vrontamitis adds that Standard Chartered has seen its underlying Rmb payments volume increase by over 200% year-on-year, and expects the currency to continue its growth in global trade.

“We expect that the proportion of China’s trade that will be redenominated to Rmb will reach 20% or over US$1tn in value by 2015. Given the importance of China to the global economy, both as an exporter and a consumer of commodities, goods and services and in terms of its sheer absolute size, we do expect corporate entities to continue to evaluate whether to use the Rmb as a currency of choice.”

The euro and US dollar remain the top payment currencies with 43% and 31% respectively.