CIPS aims to provide an inclusive platform to capture cross-border renminbi (RMB) flows to all types of participants which will extend the reach of RMB internationalisation.
The payment system is working with SWIFT to make MT messaging standards, widely used in cross-border banking transactions, compatible with the ISO20022 standards used by CIPS, through a conversion scheme.
CIPS had 19 directly participating banks and another 176 banks indirectly involved when it launched October 2015. Indirect participants have since risen to 253, but the increase is small when compared with overall growth of the Chinese currency in global payments, according to CIPS.
Another dozen banks are expected to become direct participants by the end of 2016 and the system will be connected to the bond and foreign exchange (FX) markets. An extension of operating hours to handle transactions with the Americas is being considered.
SWIFT has operated in China for over 30 years and said that nearly 400 Chinese financial institutions and corporations are connected to its platform. To date, 1.700 financial institutions have made RMB transactions using the SWIFT network.
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