China launches CIPS to shore up yuan’s global clout
The first phase of China International Payment System (CIPS) developed by the People’s Bank of China was officially launched in Shanghai on October 8. It’s an important financial infrastructure providing capital clearing and settlement services for cross-border yuan transactions for financial institutions domestically and abroad.
The system will enhance efficiency of cross-border yuan settlement and increase global use of the Chinese currency, Fan Yifei, vice president of the central bank, said at the launch ceremony.
CIPS will have a significant role in shoring up China's real economy and promoting the "going abroad" strategy of domestic enterprises, said Fan.
CIPS enables market participants outside China’s mainland to clear yuan transactions with their Chinese counterparts directly from 9 a.m. to 8 p.m. Beijing time during any working day under a coding format in line with international practice.
The central bank issued provisional rules of CIPS to specify requirements of market access, account management and business process, laying the foundation for the stable operation of the system. At the same time, the central bank also promoted the establishment of the Cross-Border Interbank Payment and Settlement (Shanghai) Co Ltd to independently operate the system under the supervision and management of the central bank.
Initially, 11 domestic banks and eight foreign banks are directly participating in CIPS. They are Industrial and Commercial Bank of China, Agriculture Bank of China, Bank of China, Construction Bank of China, Bank of Communications, China Merchants Bank, Shanghai Pudong Development Bank, China Minsheng Bank, Industrial Bank, Ping An Bank, Huaxia Bank, HSBC China, Citibank China and Standard Chartered Bank China.
In addition, 38 Chinese banks and 138 foreign financial institutions have been approved as indirect participants. They are entitled to CIPS services indirectly through one or more of the direct participants.