RMB, Gold and the Future of Commodity Trade

Recent discussions by macro strategists such as Michael Howell and Luke Gromen suggest that the next phase of global financial competition may not be centred on tariffs or trade wars, but on the future architecture of international payments and reserve currencies.

The traditional global trade model has relied on three pillars: commodities are priced in US dollars, payments are settled through the SWIFT network, and excess dollar reserves are recycled into US Treasury securities. This framework has underpinned US financial dominance for decades.

China is now building an alternative.

Rather than attempting to replace the US dollar outright, China appears to be creating a parallel trade and settlement ecosystem centred on the Renminbi (RMB), the Cross-Border Interbank Payment System (CIPS), and potentially gold as a neutral reserve asset.

The strategic proposition is straightforward:

  • Commodity exporters invoice and receive payment in RMB.
  • Cross-border payments are settled through CIPS rather than relying on the traditional dollar-based correspondent banking system.
  • Exporters that do not wish to retain RMB have the option of converting their RMB holdings into gold or other reserve assets.

This approach does not require the RMB to become a fully convertible global reserve currency. Instead, it provides international exporters with confidence that RMB received from trade can be exchanged for an internationally recognised store of value. Gold effectively becomes the bridge between competing monetary systems.

Why this matters

The ability to settle trade in RMB significantly reduces China’s dependence on the US dollar and limits its exposure to the US-led financial system. If more commodity exporters are willing to accept RMB, China becomes less reliant on SWIFT, correspondent banking networks and the US financial infrastructure that has historically provided Washington with considerable geopolitical influence through sanctions and financial restrictions.

For China, this represents a long-term strategy to internationalise the RMB while preserving control over its domestic financial system. Rather than fully liberalising its capital account, China is seeking to make the RMB sufficiently credible and liquid for international trade.

The South African opportunity

This development is particularly relevant for South Africa, which is one of the world’s largest exporters of strategic minerals, including chrome, manganese, iron ore and platinum group metals, with China being the dominant customer for several of these commodities.

The recent authorisation of Standard Bank to facilitate RMB clearing and settlement in South Africa represents an important milestone. It provides South African exporters with direct access to RMB payment infrastructure and reduces settlement friction for companies trading with China.

This positions South African banks and corporates to participate in the growing RMB trade ecosystem without relying exclusively on offshore intermediaries.

Implications for South African exporters

Should China increasingly request settlement in RMB, exporters should view this as a treasury and commercial decision rather than simply a payment preference.

Accepting RMB settlement could provide:

  • Improved access to Chinese buyers.
  • Faster and potentially lower-cost settlement.
  • Stronger commercial relationships and long-term supply agreements.
  • Reduced dependence on US dollar liquidity for China, potentially supporting sustained commodity demand.

However, exporters should ensure that:

  • Commodity prices remain linked to transparent international benchmarks (typically USD).
  • RMB is used only as the settlement currency rather than the pricing currency.
  • Efficient conversion into ZAR, USD or gold remains available.
  • Appropriate foreign exchange and liquidity risk management is maintained.

Strategic implications for Treasury

If this trend accelerates, corporate treasury functions will need to evolve beyond traditional USD-centric treasury management.

Future treasury operations may increasingly involve:

  • Multi-currency liquidity management incorporating RMB.
  • Direct connectivity to both SWIFT and CIPS payment networks.
  • Enhanced RMB cash management and hedging capabilities.
  • Greater use of gold as a strategic reserve or collateral asset.
  • Treasury systems capable of operating seamlessly across multiple global payment ecosystems.

TreasuryONE Perspective

For TreasuryONE and the South African corporate market, this represents both a challenge and a significant opportunity.

The future of international treasury is unlikely to be defined by one dominant currency. Instead, it is increasingly likely to consist of a multi-polar financial system where the US dollar remains the principal reserve currency, the RMB becomes an increasingly important trade settlement currency, and gold re-emerges as a neutral reserve asset between competing monetary blocs.

South Africa’s position as a major supplier of strategic minerals, combined with its growing RMB settlement capability through Standard Bank, places the country in a unique position to benefit from this evolving global financial architecture, provided corporates adapt their treasury strategies accordingly.