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Pan Gongsheng, the Governor of the People’s Bank of China (PBOC), recently announced that China has “initially established a multi-channel, wide-coverage RMB cross-border payment and clearing network” after over a decade of development. This announcement was made at the Lujiazui Forum.
Key takeaways from his statements and related developments include:
* Addressing Traditional System Issues: Pan Gongsheng highlighted that the traditional cross-border payment system has faced increasing challenges, including being susceptible to politicization, weaponization, and unilateral sanctions. This underscores China’s motivation to build its own robust alternatives.
* Growing Global Demand: There’s a rising global demand for improved cross-border payment systems that are more efficient, secure, inclusive, and diverse. Emerging payment infrastructures and settlement methods are continually driving this trend.
* The Role of CIPS: A central component of this network is the Cross-Border Interbank Payment System (CIPS), which specializes in RMB cross-border payment clearing. CIPS aims to provide reliable, efficient, convenient, and low-cost clearing and settlement services, acting as a direct alternative to systems like SWIFT for RMB transactions. CIPS has expanded its network to reach over 3000 banking institutions in more than 167 countries and regions.
* Digital RMB (e-CNY) Internationalization: Pan Gongsheng also announced the establishment of an international operations center for the digital RMB in Shanghai. This center is designed to promote the internationalization of the digital renminbi and foster the development of financial market services, supporting innovation. This initiative aims to make it more convenient for countries to use the Chinese currency in cross-border trade and investment.
* Increased RMB Usage: China has been steadily promoting the international use of the RMB. The share of the RMB in cross-border receipts and payments in trade in goods increased significantly in 2023, making it the largest cross-border receipt and payment currency in China. The RMB also became the fourth most active currency for global payments by value.
* Technological Advancements: New technologies like smart contracts and decentralized finance are rapidly being integrated into cross-border payments, fundamentally reshaping the traditional payment landscape and shortening the cross-border payment chain.
* Multilateral Initiatives: China is also involved in multilateral initiatives like mBridge, a cross-border CBDC project that has entered its Minimum Viable Product (MVP) stage for continuous operations.
In essence, China is actively working to diversify and strengthen its RMB cross-border payment and clearing infrastructure to enhance efficiency, reduce reliance on existing dominant systems, and further promote the international use of its currency.

Video courtesy of Interactive Brokers

Video courtesy of Interactive Brok ers