Cross-border International Payments System - CIPS

[grand]

China’s international payment system set for launch

A long-awaited China International Payment System (CIPS) that would facilitate international usage of the yuan is ready and it could be launched as early as September or October, three sources with direct knowledge of the matter told Reuters.

The system, which would be a worldwide payments superhighway for the yuan, will replace a patchwork of networks and allow hassle-free yuan transactions, greatly boosting the internationalization of the Chinese currency.

"The CIPS is ready now and China has selected 20 banks to do the testing, among which 13 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 the Chinese authorities are striving to launch the first phase of the CIPS before December.

"It's not a plan but we are trying our best to have the first phase [of the CIPS] online before the end of this year," said the source, who declined to be named because he is not authorized to speak to the media.

"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," he said.

The People's Bank of China, the central bank, was not immediately available for comment when contacted.

 

[TaiShang]

China's International Payments System Could Launch by End of 2015
2015-03-10 08:46:10 CRIENGLISH.com

An employee counts Chinese one hundred yuan banknotes in this arranged photograph inside the Hang Seng Bank Ltd. headquarters in Hong Kong, China, on Wednesday, Feb. 18, 2015. [Photo: CFP]


It's being reported the China International Payment System (CIPS) to process cross-border yuan transactions may be launched this year.

A total of 20 banks have reportedly been selected to take part in the pilot scheme.

13 of the banks are Chinese.

The rest are subsidiaries of foreign banks.

The official launch may take place in September or October, depending on the results of testing.

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 else with the help of a correspondent bank on the mainland.

The launch of the CIPS is expected to help increase global use of the Chinese currency by cutting transaction costs and processing time.

CIPS is expected to use the format as other international payment systems, which should make it easier to deal with other banks around the world.

***

CIPS – Opportunities ahead for Chinese renminbi (RMB)

A decade back, thinking of Chinese currency and the restrictions in terms of convertibility associated with these, there was no option available for FIs outside China but to have processes as per Chinese Govt rules.

Over the last few years, there has been lot of development to have more exposure to Chinese currency rinminbi (RMB) wherein Chinese govt looking to establish it as international currency and thus use for inward/outward trade purposes in China.

In line with this, earlier this month, People’s Bank of China (PBOC) announced that they are planning to develop a new International Payment System referred asChina International Payment System (CIPS) to have

• Centralize and come up with new payment channel for RMB cross-border

• Consolidation and streamlining the existing RMB cross-border payment channels

• Better usage of resource, make effective improvements to have better clearing and settlement processes

• Path to project RMB as an international currency for trade and services

Proposed system is expected to process RMB payments across different time-zones, better clearing security and build robust system for current clearing participating members.

As the trade between China and United States increased over last few years and toppled USA-Germany bilateral trade, it has become inevitable for Chinese Govt to put further restrictions under international pressure and effort to let RMB grow as internationally accepted currency. Market is growing rapidly towards the currency internationalization and China Banks are coming forward to achieve this. Objective is to setup an international clearing standard and processes which will further lead to RMB growth and as a competitive currency against Dollar, euro and GBP.

New clearing is expected to have dedicated platform for cross-border RMB payments. Currently these are handled by either CNAPS (existing Local RTGS in CHINA like FEDWIRE) or SWIFT. CNAPS was originally designed and established to process mainland China payments. This in-country RMB clearing system was processing the cross-border RMB payments as well, but with some limitations. Couple of the major ones listed below

• Incompatible SWIFT and CNAPS payment message format

• Local language requirements acting as overhead for manual processing and thus having impact on overall STP (straight through processing) rates

Major requirement here would be to eliminate overheads carried since the time of CNAPS clearing. This would further help the ongoing effort of Chinese Govt. and Banks for internationalization of RMB currency. International FIs are looking forward to have RMB currency with fewer restrictions on movement and better convertibility.

Possibly there would an interface between existing CNAPS and newly proposed CIPS wherein CIPS is expected to enable automation of clearing and settlement for agent banks. This will lead to a lower manual processing overheads, better STP rate and efficient usage of system resources.

Have two different systems for in-country and cross-border payments may lead to a structure followed currently in United States – CHIPS and Fedwire. In United States, CHIPS is responsible for more than 90% of US dollar cross-border flow whereas Fedwire is mostly used for in-country dollar transactions. There are currently 53 participant members in CHIPS and this includes 6 Chinese Banks as well. These members can leverage the settlement expertise present in CHIPS and have CIPS follow the line to become major clearing and settlement for RMB. Though there are other standard processes established around the world and can be considered.

 

[JSCh]

The one Chinese innovation that could change the way we think about money - The Washington Post
By Dominic Basulto March 10 at 8:59 AM Follow @dominicbasulto

The upcoming launch of the new China International Payments System is part of a broader internationalization strategy for China’s currency to make it accepted worldwide. (Reuters)
The new China International Payments System (CIPS), which is set to debut before the end of 2015, has been described as a “worldwide payments superhighway for the yuan.” What the creation of such a system means in the short-term is that the Chinese currency (officially known as the renminbi) has the potential to become a truly international, convertible currency and a more attractive currency for conducting international trade and finance. What it means in the long-term is that America’s long reign of economic dominance is at risk.

Ever since the end of World War II, the dollar has been the bedrock of the international financial system. The rise of a competitor currency to challenge the dollar seems almost impossible. While the euro and the yen have emerged as possible options for supplanting the dollar, they have never had the global clout of the U.S. dollar. China’s plans for the internationalization of the renminbi, though, are a different matter entirely. Given the size and heft of China’s economy, it only makes sense that China is creating a global payments system to make it easier for people to trade, invest and conduct transactions using the renminbi.

One way to measure how important the Chinese currency has become worldwide is to look at the percentage of international trade finance deals that are conducted using the renminbi. On a global basis, the renminbi accounts for nearly 9 percent of all trade finance deals worldwide, the second largest behind only the dollar. Moreover, as of January 2015, the renminbi is now the fifth most used payments currency in the world, trailing only the dollar, the euro, the pound sterling, and the yen. According to Wim Raymaekers, Head of Banking Markets at SWIFT, this is “an important milestone” that confirms the transition of the renminbi from an “emerging” to a “business as usual” payment currency.

One area where the launch of the new Chinese payments system could really have an impact is in the global energy markets. As a result of the so-called “petrodollar system” established between the U.S. and Middle East oil producers, oil exports are priced and transacted in dollars. Now imagine the price of oil being quoted in Chinese yuan and not U.S. dollars. What if Saudi oil exporters decide they want yuan and not dollars for their oil? That means anyone buying or selling oil in commodity markets has to have a yuan bank account in addition to a dollar bank account. Given the voracious energy demands of China’s growing economy, it’s easy to see why a global payments system facilitating these trades makes sense.

While 41 percent of all global payments involve the dollar, only 2 percent involve the renminbi. But think ahead a few years. If the Chinese economy continues to grow, if plans continue to internationalize the renminbi, and if gridlock in Washington continues, it’s at least theoretically plausible that the renminbi could eventually supplant the dollar as the reserve currency of choice around the world. Especially since the investment theme of “de-dollarization” has started to be picked up globally.

If the renminbi ever replaces the dollar, there are going to be effects felt from Wall Street to Main Street. For one, foreign investors won’t need to hold as many dollars since they’ll be conducting transactions in yuan instead. That means they will have fewer dollars to invest in dollar-denominated U.S. government debt — the same debt that is the key to financing massive U.S. budget deficits. To keep foreign investors investing in this dollar-denominated debt, the U.S. government would have to jack up interest rates. Moreover, if all the dollars held globally ever make their way back to the United States, that influx of dollars could lead to crushing domestic inflation and a whole host of uncomfortable economic consequences.

Of course, building the CIPS is just the next logical step in the internationalization of the renminbi. Things won’t change overnight — or perhaps ever. However, keep in mind that China has hatched a number of other plans to transform the international financial system. With the rise of the BRICS, for example, China is looking for alternatives to a Western-dominated international financial system. Last year, the Chinese helped to launch a new BRICS Development Bank based in Shanghai as a competitor to the World Bank and International Monetary Fund. Anyone want to guess whether this bank in the future will be making loans in dollars or yuan?

The internationalization of the renminbi is easier said than done. You don’t just wave your hands and your currency becomes the world’s primary reserve currency. You have to build trust. The Brookings Institution, for example, has recently highlighted five big political challenges facing the internationalization of the renminbi. One big drawback, of course, is the fear of “capital controls” imposed by the Chinese government. In layman’s terms, you may shift your money into renminbi and not be able to get your money out when and how you need it. That understandably spooks anyone thinking of dumping dollars for yuan.

It’s only in the past decade that the Chinese have launched an aggressive drive to internationalize the renminbi. There’s still a lot to be done, but the creation of CIPS appears to be the next logical step in changing how the world thinks about the renminbi. If the Chinese economy is indeed taking over the world, it will need a currency that is also capable of taking over the world.

 

[yusheng]

1, the renminbi cross-border payment system (CIPS) is China's controlling 'payment channels" for BRICS;
Please pay attention to "RMB internationalization (China pay channel)" and "internationalization of the RMB ,western pay channel" - the difference is who master the pay channel, (historically, the western hand all the channels, such as VISA, mastercard and other payment channels.

2, core focus: "the Chinese renminbi cross-border payment system (CIPS) is ready, may be launched in September or October at the earliest" , the time table is the point - if the US federal reserve raises interest rates in June, according to the time calculation, September is the time pint to declare "China officially starts to build a China's dominant, not the western dominant international financial system ", time points perfectly match.

If the US interest rates raise be postponed, the Chinese renminbi cross-border payment system (CIPS) will be delayed accordingly.

 

[TaiShang]

China Makes Final Preparations for Massive International Payments System
March 11, 2015 by Michael Cheng

Image credit: Sharon Drummond

If all goes as planned, China International Payment System (CIPS) could be ready for consumers by the end of the year. The mega offering is designed to streamline international cross-border yuan payments.

China is hoping to strengthen its currency by facilitating reliable transactions with competitive rates. The success of CIPS could help the yuan catch up with other dominant currencies circulating the global market today.

“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. 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 senior banking source.

According to Reuters, CIPS was supposed to launch last year but underlying technical issues forced individuals working on the project to postpone the unveiling. Many still consider the new proposed launch date to be timely, as experts calculate the real launch date to be in 2016.

CIPS provides numerous advantages for consumers worldwide. The efficient system ensures faster processing, reducing the time it takes to settle transactions. Such advancements could help businesses lower costs and expedite payments issues with ease.

It may also boost the currency’s reputation and promote its overall usability for trade and purchase.

Raymond Yeung, ANZ analyst in Hong Kong, mentioned, “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.”

Earlier this year, the yuan made it to the top five international currencies, beating the Canadian dollar and the Australian dollar in the process. With CIPS in full swing, the currency reaching the big three in the future is highly probable.


**

Russia may use China’s payment infrastructure instead of SWIFT — VTB Bank head
11/03/2015 TASS

Russia may eventually use China’s payment infrastructure instead of international bank message system SWIFT, VTB Bank Chief Andrey Kostin said in an interview with Bloomberg news agency on Wednesday.

"With time but not now," Kostin said in reply to a question about whether Russia would be able to switch to the Chinese International Payment System (CIPS) if it experienced problems with SWIFT.

The VTB head said the international financial system was becoming not very convenient for Russia as it posed a threat to Russia’s security.

‘We’ll definitely work closer with Chinese colleagues to develop alternative systems," the head of Russia’s second largest bank said.

The VTB chief said he doubted that the situation would develop to extremes.

"I don’t believe there will be a decision on disconnection because this is a very unfriendly and even alien step towards Russia," he said.

The news agency Reuters reported on Tuesday China might launch an international payment system for external settlements in yuans in September-October 2015.

The CIPS will allow banks in various countries to exchange instructions in yuans instead of US dollars thanks to lower transaction costs.

Last year, Western countries considered disconnecting Russia from SWIFT as a possible sanction over Russia’s stance on developments in neighboring Ukraine. The proposal was made by UK Prime Minister David Cameron and was also mentioned in a resolution of the European parliament.

SWIFT representatives said, however, they were not going to disconnect Russia from their system, despite political pressure they were experiencing. Being EU-based, SWIFT may disconnect Russia only if a relevant decision is made by the EU authorities, the international bank message system said.

Russia’s Central Bank has already started testing alternatives to SWIFT in Russia, over the threat of Russia’s possible disconnection.

Russia’s Central Bank provided domestic banks access from December 2014 to its alternative to the SWIFT bank message system for transactions inside Russia.

Russia’s Central Bank has said the new service is intended to ensure uninterrupted and secure transfer of financial messages inside the country.

Deputy Director of the Central Bank’s National Payment System Department Ramilya Kanafina said in November the regulator planned to complete establishing an alternative to the SWIFT international financial message system in May 2015.

The regulator also planned to establish a separate SWIFT-format processing center, she added.

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) transmits 1.8 billion communications a year, remitting payment orders worth $6 trillion a day. The system comprises over 9,000 banks from 209 countries.

Under the SWIFT charter, groups of members and users are set up in each country covered by the system. In Russia, these groups are united in the RosSWIFT association.

 

[大汉奸柳传志]

China’s SWIFT alternative (CIPS) and the engineered death of the dollar | China Daily Mail
MARCH 31, 2015

Forget all the nonsense and hoopla about the Apple Watch or the GM stock buy-back. Far and away the most important economic story of the week is one you won’t find on the front page of Bloomberg or MarketWatch.

New reports indicate that China is ready to launch its SWIFT alternative, and for those who have their ear to the ground this is the most significant move yet in the unfolding process of de-dollarisation that is seeing the BRICS-led “resistance bloc” breaking away from the financial stranglehold of the US-led “Washington Consensus.”

For those who don’t know, SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication and is shorthand for the SWIFTNet Network that is used by over 10,500 financial institutions in 215 countries and territories to transmit financial transaction data around the world.

SWIFT does not do any of the clearing or processing for these transactions itself, but instead sends the payment orders that are then settled by correspondent banks of the member institutions. Still, given the system’s near universality in the financial system, it means that virtually every international transaction between banking institutions goes through the SWIFT network.

This is why de-listing from the SWIFT network remains one of the primary financial weapons wielded by the US and its allies in their increasingly important financial warfare campaigns. In 2012, SWIFT agreed to de-list 30 Iranian financial institutions (including the central bank) from their network as part of the US/EU-led sanctions on Tehran, a move that was meant to stop billions of dollars’ worth of oil and export sales from being repatriated into the country and bring Iranian business to a standstill.

Throughout the recent tensions between the US bloc and Russia over the civil war in Ukraine, the idea that SWIFT could similarly de-list Russian banks has been repeatedly floated as a potential next step for the US and its allies.

Of course, SWIFT is nominally “independent” from any government entity and thus does not have to follow the dictates of Washington or anyone else pursuing their own personal vendettas in the financial arena. In practice, however, SWIFT put up no resistance whatsoever and obligingly complied with the Iranian sanctions request despite the fact that the blockade was repeatedly ruled illegal by the EU’s own courts.

Does anyone doubt that, despite their protestations to the contrary, they would do any different if push came to shove with Russia? This is precisely why Moscow, Beijing and other countries in the cross hairs have been floating ideas of their own, namely the creation of an alternative payment network that bypasses SWIFT.

Now it seems that talk is materialising into something very real. Called the China International Payment System, the CIPS network is meant to facilitate cross-border transactions specifically in yuan and the latest reports suggest that the system is already in place and could be launched as early as this September.

If and when CIPS is launched, the results could be world historical in nature. Firstly it provides the Kremlin and other US/EU/NATO/Israeli enemies a potential alternative safe haven from the crippling sanctions that hang over their head in the current environment.

Secondly, it brings the yuan one step closer to being a fully-convertible currency, something that Beijing has been scrambling to achieve since the currency was rejected from the IMF’s SDR basket following the last reconsideration of that basket in 2010. And finally, it further solidifies China as the centre of the worldwide “resistance bloc” to the current status quo.

It’s hard to underestimate just how important CIPS will be to making the yuan a major player on the global stage. Rather than having to clear yuan payments through correspondent banks in China or through specially designated clearing houses in Hong Kong or Europe or elsewhere, payments will now be nearly instantaneous through any CIPS-listed financial institution anywhere in the world.

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[TaiShang]

Sputnik News does it best.

 

[Beidou2020]

SWIFT’s RMB Tracker shows that the RMB is now the most active currency used by Asia for payments with China and Hong Kong

Brussels, 27th May 2015 – SWIFT’s RMB Tracker shows that the value in weight of the RMB used for payments exchanged with China and Hong Kong within Asia Pacific increased by 327% between April 2012 and April 2015. During this three year period, the Chinese currency moved from position number five to the top currency used in Asia Pacific to do business with Greater China.

On average, 31% of payments in Asia Pacific with China and Hong Kong are now made in RMB, up from 7% in April 2012. This growth is driven by the increase of RMB usage in most Asian countries to trade directly with China and Hong Kong. Over three years, most Asian countries moved from being low users (under 10% RMB) to medium users (between 10% and 50%). Out of 26 countries, within the region and using the RMB for direct payments with China and Hong Kong, only nine are considered low users compared to 19 in 2012. Six countries are now considered high users of the currency.

“Asia Pacific is clearly paving the way forward when it comes to RMB adoption,” says Michael Moon, Head of Payments Asia Pacific at SWIFT. “Big trading partners like Singapore, Taiwan and South Korea have adopted the RMB for the majority of their payments with Greater China. The new appointments of four clearing centres (South Korea, Malaysia, Thailand and Australia) within the region should also have a positive impact on RMB adoption, solidifying the important role of the currency within Asia Pacific and abroad.”
Overall, the RMB remains in its position as the fifth most active currency for global payments and accounted for 2.07% of payments worldwide. Its activity share is higher than last month even though RMB payments decreased in value by -6.7% compared to April 2015, while at a global level, all currencies decreased in value by -8.2% over the same period.

 

[TaiShang]

China to launch international payment system
June 12, 2015
The People's Bank of China, the central bank, plans to accelerate the launch of its international payment system, with the first phase of the rollout by the end of this year, according to a report on its website.

This system will be located in Shanghai, the central bank's former deputy governor Liu Shiyu said earlier, and will enable foreign banks to be part of the yuan clearing business.

The steps will also accelerate yuan's internationalization by creating a bigger and more diverse group of clearing banks, making the yuan clearing process cheaper, which is very important, said experts.

The central bank will encourage government departments to use the yuan as the main currency in statistics, settlements and in the management of foreign-related economic work.

In the report, the PBOC said China will continue to push for the yuan's inclusion in the International Monetary Fund's Special Drawing Rights basket, and encourage foreign central banks to include yuan assets in their forex reserves.

"We are considering removing the quotas for foreign institutional investors in the interbank bond market," it said.

The central bank also wants foreign institutions to issue yuan-denominated bonds in the onshore market, and expand yuan lending in offshore market.

A research note from Standard Chartered Plc said that the yuan is likely to be "more freely used" by 2018.

"A 60 percent probability of success will be there for the yuan to join the SDR basket as an international foreign reserve," said the Standard Chartered note.

 

[TaiShang]

CHINA SETS SIGHTS ON CROSS-BORDER PAYMENTS

8:15 AM EDT June 12th, 2015

China is no stranger to international commerce, with a long history of overseas business among its manufacturers and domestic digital commerce companies promoting their services for buyers outside national borders. But the nation has struggled more so with adopting the yuan into these transactions.

In its most recent strategy, the nation is now looking to strengthen cross-border payments by supporting financial services for both domestic and overseas institutions that operate with Chinese currency. According to reports, the People’s Bank of China announced Thursday (June 11) that it will support the expansion of cross-border finance for enterprise in an aim to boost the yuan’s international standing.

The plan encourages international institutions to issue bonds in yuan, reports said, allowing Chinese companies to raise funds in their own currency offshore. Officials are also reportedly planning to lower barriers to entry into its interbank bond market for overseas entities. Similarly, the central bank is also planning to relax restrictions on domestic institutions’ ability to issue bonds in yuan overseas, without the requirement to seek approval from the National Development and Reform Commission.

Part of this venture, dubbed the China International Payment System, would be to seek inclusion of the yuan in the International Monetary Fund’s Special Drawing Rights.

“China will continue to facilitate renminbi internationalization by removing unnecessary policy parries and providing necessary infrastructure,” the People’s Bank of China reportedly stated.

Officials said the first phase of the China International Payment System would be completed by the end of the year and aims to strengthen trade settlement and investments in the yuan currency.

Reports of China’s cross-border payments push came the same day that Hong Kong-based PayEase, the nation’s top e-payment service provider, announced that it was awarded the “2014–2015 Most Popular Cross-Border Payment Enterprise” at an event held by several official groups, including the Ministry of Commerce Bureau of Foreign Trade Development Affairs.

 

[cirr]

China launches yuan cross-border interbank payment system

China's central bank on Thursday launched the China International Payment System (CIPs), a worldwide payments superhighway for the yuan to facilitate trade settlement and investment dominated in the yuan.
PHOTO: AFP

OCT 8, 2015 9:31 AM

[BEIJING] China's central bank on Thursday launched the China International Payment System (CIPs), a worldwide payments superhighway for the yuan to facilitate trade settlement and investment dominated in the yuan.

CIPS will replace a patchwork of existing networks that make processing renminbi payments a more cumbersome process.

It will comprise of two phases, the first of which will look to facilitate cross-border yuan business activities and support trade in goods and services. The second will improve clearing efficiency for direct participants in the yuan market, the People's Bank of China said in a statement on its website.

REUTERS

China launches yuan cross-border interbank payment system, Government & Economy - THE BUSINESS TIMES

 

[TaiShang]

China launches yuan cross-border interbank payment system

China's central bank on Thursday launched the China International Payment System (CIPs), a worldwide payments superhighway for the yuan to facilitate trade settlement and investment dominated in the yuan.
PHOTO: AFP

OCT 8, 2015 9:31 AM

[BEIJING] China's central bank on Thursday launched the China International Payment System (CIPs), a worldwide payments superhighway for the yuan to facilitate trade settlement and investment dominated in the yuan.

CIPS will replace a patchwork of existing networks that make processing renminbi payments a more cumbersome process.

It will comprise of two phases, the first of which will look to facilitate cross-border yuan business activities and support trade in goods and services. The second will improve clearing efficiency for direct participants in the yuan market, the People's Bank of China said in a statement on its website.

REUTERS

China launches yuan cross-border interbank payment system, Government & Economy - THE BUSINESS TIMES

That was planned for by the end of this year.

So, it has been launched finally!

@Beidou2020

 

[cirr]

That was planned for by the end of this year.

So, it has been launched finally!

@Beidou2020

The launch date has been brought forward for some well thoughtout reasons。

 

[cirr]

Standard Chartered says has completed yuan clearing for Sweden's IKEA via CIPS



1 hour ago

HONG KONG (Reuters) - Standard Chartered Bank (China) Limited said on Thursday it had completed a yuan clearing transaction for Sweden's IKEA through the China International Payment System (CIPS), the first such deal to be announced hours after Beijing launched the worldwide system.

The bank said it had finished the transaction from China to Luxembourg for the Swedish home furnishing retailer, noting it was the bank's first international yuan direct clearing via CIPS.

China's central bank earlier on Thursday launched the worldwide payment superhighway to encourage greater use of the yuan for trade settlement and investment, confirming an earlier Reuters report.

"Direct international RMB payment clearing via Standard Chartered enables a simpler payment route and enhances IKEA's liquidity management," said Lena Li, Treasury manager at IKEA China.

Before the new system was launched, cross-border yuan clearing had to be done either through one of the offshore yuan clearing banks in the likes of Hong Kong, Singapore and London, or else with the help of a correspondent bank in mainland China.

The launch of CIPS 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.

"CIPS will enhance China's connectivity with the global financial system, providing a highly efficient platform for cross-border RMB settlement," said Michael Vrontamitis, head of Trade at Standard Chartered Bank.

(Reporting by Michelle Chen; Editing by Kim Coghill)

Standard Chartered says has completed yuan clearing for Sweden's IKEA via CIPS - Yahoo Finance

 

[TaiShang]

Standard Chartered says has completed yuan clearing for Sweden's IKEA via CIPS



1 hour ago

HONG KONG (Reuters) - Standard Chartered Bank (China) Limited said on Thursday it had completed a yuan clearing transaction for Sweden's IKEA through the China International Payment System (CIPS), the first such deal to be announced hours after Beijing launched the worldwide system.

The bank said it had finished the transaction from China to Luxembourg for the Swedish home furnishing retailer, noting it was the bank's first international yuan direct clearing via CIPS.

China's central bank earlier on Thursday launched the worldwide payment superhighway to encourage greater use of the yuan for trade settlement and investment, confirming an earlier Reuters report.

"Direct international RMB payment clearing via Standard Chartered enables a simpler payment route and enhances IKEA's liquidity management," said Lena Li, Treasury manager at IKEA China.

Before the new system was launched, cross-border yuan clearing had to be done either through one of the offshore yuan clearing banks in the likes of Hong Kong, Singapore and London, or else with the help of a correspondent bank in mainland China.

The launch of CIPS 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.

"CIPS will enhance China's connectivity with the global financial system, providing a highly efficient platform for cross-border RMB settlement," said Michael Vrontamitis, head of Trade at Standard Chartered Bank.

(Reporting by Michelle Chen; Editing by Kim Coghill)

Standard Chartered says has completed yuan clearing for Sweden's IKEA via CIPS - Yahoo Finance

Looks like CIPS is already up and running.