Three, two, yuan: Countdown to China’s new payment system has begun

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, Reuters says. Currently cross-border yuan clearing has 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 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. The official launch will be in September or October, depending on the results of the testings and preparation.

Senior banking source, speaking to Reuters

The launch of the China International Payment System (CIPS) will remove one of the biggest hurdles to internationalizing the yuan and should increase global usage of the Chinese currency by cutting transaction costs and processing times. Global yuan payments increased by 20.3% in value in December compared to a year earlier, while the growth for payments across all currencies was 14.9% for the same period.

Business Yuan