Activity

Beijing, China – China’s Cross-Border Interbank Payment System (CIPS) has reportedly signed agreements with six foreign financial institutions to join as direct participants. This move is a significant step in facilitating the international use of the Chinese yuan (RMB) in cross-border transactions and expanding CIPS’s global reach.
According to reports, the new direct participants include:
* Standard Bank (South Africa)
* African Export-Import Bank (Afreximbank)
* First Abu Dhabi Bank (UAE)
* Kyrgyzstan’s Eldik Bank
* United Overseas Bank (UOB – Singapore)
* Bangkok Bank (Thailand)
This marks the first time CIPS’s overseas foreign direct participant coverage extends to offshore yuan centers in Africa, the Middle East, Central Asia, and further solidifies its presence in Southeast Asia. An official onboarding ceremony for Bangkok Bank’s direct participation was also conducted.
What is CIPS?
Launched in 2015 by the People’s Bank of China (PBOC), CIPS is China’s primary payment system for cross-border RMB clearing and settlement. It aims to streamline RMB transactions, enhance efficiency, and reduce reliance on traditional international payment networks like SWIFT (though CIPS still utilizes SWIFT for messaging in many cases). As of the end of May, CIPS had 174 direct participants and 1,509 indirect participants globally.
Significance of Direct Participation:
Direct participation in CIPS offers several advantages for foreign banks:
* Real-time Gross Settlement (RTGS): Direct participants can access real-time, gross settlement for RMB transactions, leading to faster and more efficient cross-border payments.
* Lower Costs: By eliminating intermediate steps and correspondent banking relationships, direct access can significantly reduce payment and clearing costs.
* Enhanced Control and Transparency: Direct participants have greater control over their RMB transactions and improved transparency in the settlement process.
* Expanded Reach: It allows foreign banks to directly connect with the broader CIPS network, facilitating cross-border RMB payments and settlements for their clients and handling transactions on behalf of indirect participants.
* Facilitating RMB Internationalization: For China, increasing direct participation by foreign banks is a key strategy in advancing the internationalization of the yuan, making it more widely used in global trade, investment, and financial transactions.
The expansion of CIPS’s direct participant network reflects China’s ongoing efforts to build a multi-polar currency system and enhance the yuan’s role in the global economy, providing alternatives to the traditionally dollar-dominated financial landscape.

Video courtesy of First Bank of Nigeria

Video courtesy of First Bank of Nigeria