International payment system ready
Print Edition
CHINA’S long-awaited international payment system to process cross-border yuan transactions is ready, and may be launched as early as September or October, three sources with direct knowledge of the matter said.
The launch of the China International Payment System will remove one of the biggest hurdles to internationalizing the yuan and should greatly increase global usage of the Chinese currency by cutting transaction costs and processing times.
It will also put the yuan on a more even footing with other major global currencies like the US dollar, as CIPS is expected to use the same messaging format as other international payment systems, making transactions smoother.
CIPS, which would be a worldwide payments superhighway for the yuan, will replace a patchwork of existing networks that make processing yuan payments a more cumbersome process.
“The CIPS is ready now, and China has selected 20 banks to do the testing, among which 13 banks are Chinese banks and the rest are subsidiaries of foreign banks,” said a senior banking source who is involved in the matter.
The official launch will be in September or October, depending on the results of the testing and preparation, the source said.
A second source with direct knowledge of the matter said authorities want to launch the first phase of CIPS before December.
“If it’s all smooth, (the launch) will be in September or October. If there is a need for a bit more time, we are still confident about (rolling it out) before the year-end,” said the source, who declined to be named because he is not authorized to speak to the media.
The system was expected to be launched in 2014 but was delayed by technical problems, with most market participants anticipating it would not come on stream before 2016.
Currently, cross-border yuan clearing has to be done either through one of the offshore yuan clearing banks in Hong Kong, Singapore and London, or with the help of a correspondent bank on China’s mainland.
“Misunderstandings under the current clearing system happen from time to time due to different languages and codings. The CIPS is a breakthrough since it will offer a united platform and enhance efficiency,” said Raymond Yeung, an analyst at ANZ in Hong Kong.
The launch of CIPS will enable companies outside China to clear yuan transactions with their Chinese counterparts directly, reducing the number of stages a payment has to go through.
The yuan became one of the world’s top-five payment currencies in November, according to global transaction services organization SWIFT.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
