PBOC launches pilot project for offshore yuan foreign exchange trading in Shanghai FTZ — six major banks authorized, emergency liquidity mechanism for non‑bank institutions in the works
Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and China CITIC Bank have been authorized to operate through the China Foreign Exchange Trade System platform. The central bank is also exploring a macroprudential liquidity support instrument for non‑bank financial institutions in case of systemic stress.
As reported by CCTV+, the People's Bank of China (PBOC), the country's central bank, will launch a pilot project for offshore yuan foreign exchange trading in the Shanghai Free Trade Zone (FTZ), PBOC Governor Pan Gongsheng announced on Wednesday. Speaking at the opening ceremony of the two‑day Lujiazui Forum 2026 in Shanghai, Pan said the pilot programme is designed to promote two‑way opening of the currency market, facilitate integration of domestic and offshore markets, and support Shanghai's transformation into a global yuan asset allocation and risk management centre.
"The PBOC will authorize six banks, including the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), the Bank of China (BOC), the China Construction Bank (CCB), the Bank of Communications (BOCOM) and China CITIC Bank, to conduct offshore yuan foreign exchange trading in the Shanghai FTZ through the China Foreign Exchange Trade System platform," Pan said.
Pan added that the central bank will explore the possibility of establishing a macroprudential liquidity support instrument for non‑bank financial institutions under specific conditions. "When bond markets and other markets face systemic pressure, normal liquidity channels are blocked, and financial institutions collectively face a liquidity crisis that could trigger systemic risks, we will provide emergency liquidity support to non‑bank institutions through swap mechanisms. In designing the mechanism, we will take into account the need to maintain the stable functioning of financial markets to prevent moral hazard in the financial sector," Pan said.
The Shanghai Free Trade Zone (FTZ), established in 2013, is one of China's first and largest pilot free trade zones. Offshore yuan operations refer to transactions in the Chinese currency conducted outside mainland China, contributing to the internationalisation of the renminbi. The six authorized banks are China's largest state‑owned commercial banks. A macroprudential liquidity support instrument is a mechanism that allows the central bank to provide emergency liquidity to non‑bank institutions (insurance companies, investment funds, etc.) in the event of a systemic crisis when normal market channels are blocked.
When the central bank opens the offshore market for the yuan and six giants of the financial system receive new mandates, the world takes notice: China is not just talking about internationalising its currency — it is taking the next step. The Shanghai FTZ is becoming not just a territory, but a platform where the yuan learns to breathe freely in global markets. And the emergency liquidity mechanism for non‑bank institutions is insurance in case markets lose their balance. China is building a financial architecture where every player has a place, and the system has a safety margin. And when the yuan begins to circulate confidently beyond the mainland, it will change not only bank balance sheets, but the very rules of the global game.
