Anti-money laundering specialist Anomaly42 said the increased scrutiny of international dollar-based wire payments from US authorities has pushed criminal attention towards the renminbi, which carries less banking and regulatory scrutiny.
It comes after the Bank of England appointed the China Construction Bank as its London renminbi clearing house in June, in a bid to make the capital a hub for Chinese currency dealing.
At the time, chancellor George Osborne said that UK Export Finance will also start to give guarantees for transactions denominated in renminbi.
Anomaly42 said there were “clear ramifications” for UK authorities, as global money laundering is estimated to reach between $1.4trn and $3.6trn annually.
The company added that countering money launderers offers Chinese authorities an opportunity to make the renminbi the “default global currency” by setting a “golden global standard”.
Director of strategy and innovation at Anomaly42, Freddie McMahon, said today’s money launderers have become “highly sophisticated” and monitor the “every move” of banks and regulators.
“The dollar is becoming increasingly high risk, and it’s a level of risk money launderers are proving less willing to take,” he said. “Relative to the dollar, the renminbi is off the beaten track and affords a new level of camouflage for criminal transactions.”
“With London set to become a clearing centre for the renminbi, exactly how prepared is the UK for this level of responsibility?
In July, the company said developments in financial crime technology could uncover a £250bn "storm" of money laundering fines.
It said the global use of technology to scan for financial crime will expose a “countless” amount of banks by 2020.