China Ready to Take on USD
The first stage of the cross-border interbank payment system was launched today in Shanghai, promoting the global use of the currency.
Fan Yifei, deputy governor of the People’s Bank of China, the central bank called it a milestone.
The system, which provides capital settlement and clearing services for cross-border yuan transactions for financial institutions, will boost the global use of the yuan, by cutting costs and processing times, he said.
Previously, cross-border yuan clearing had to be done either through one of the offshore yuan clearing banks, such as those in Hong Kong, Singapore or London, or with the help of a corresponding bank on the Chinese mainland.
CIPS will play a significant role in shoring up China’s real economy and promote domestic enterprises “going abroad,’’ Fan said.
The worldwide “payment superhighway,’’ will accelerate the internationalization of the yuan, said Hu Xiaolian, president of the Export-Import Bank of China.
Developed and administered by the central bank, CIPS will run from 9 a.m. to 8 p.m. Beijing time.
Nineteen banks have been named direct participants of CIPS, including four major Chinese banks, and HSBC Bank (China), Citibank China and Standard Chartered China, all of which are allowed to open accounts with CIPS and receive services directly.
In addition, 38 Chinese banks and 138 foreign financial institutions have been approved as indirect participants.
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