Published By : 08 Oct 2015 | Published By : QYRESEARCH
The initial phase of CIPS or China International Payment System has been already launched in Shanghai, China. The CIPS is intended to render clearing services and capital settlement of cross-border currency transaction. The services will be available for institutions operating domestically, and those operating abroad alike, as reported by the Xinhua News Agency.
Amid the ongoing economic volatility, China has launched this international payment system with an aim to internationalize yuan, as reported by the state media on Thursday, Oct 8th. The latest strategy by the Chinese government will not only boost the country’s financial services strategies but it will also help increase the efficiency and global use of yuan – the Chinese currency, by reducing costs as well as processing time, said the Vice President of the People’s Bank of China, Fan Yifei.
Xinhua also reported that cross-border currency clearing earlier was carried out either through offshore yuan clearing banks, located in places like London, Singapore, and Hong Kong, else through a corresponding bank located anywhere in the China mainland.
A latest news report quoted Fan as saying CIPS in the near future will place a crucial role in shoring up the country’s real economy, and promoting its goal of internationalizing domestic enterprises. The system designed, developed, and administered by the China central bank allows market participants outside the country to clear yuan transactions that have been pending with their Chinese counterparts directly between 9am and 8pm during the working hours of any given day. However, this has to be carried out in a coding format that is attuned to the international practice.
As reported by SWIFT, the global transaction services organization, China’s currency ‘yuan’ has risen to the top five payment currencies of the world in November 2014, surpassing the Canadian and Australian dollar.