China has expanded its onshore central clearing system to include more foreign currencies, advancing efforts to promote direct trading with the yuan and reduce reliance on the dollar. The Shanghai Clearing House began central counterparty (CCP) services for spot trades of the Singapore dollar, New Zealand dollar and Thai baht on Sept. 14, according to a statement Wednesday. Twelve banks participated in the inaugural session, clearing 996 million yuan ($148 million) of transactions.

The move represents another step in China's broader strategy to internationalize the yuan by building infrastructure that allows direct currency conversion without routing through the US dollar. By adding these three currencies to its central clearing platform, China aims to lower transaction costs and settlement risks for market participants.

The expansion follows previous additions to the clearing system and signals continued progress in developing offshore yuan markets. Financial institutions can now clear spot trades directly through the Shanghai Clearing House, enhancing efficiency for cross-border trade and investment denominated in yuan.