People’s Bank of China (PBC) has launched the China International Payment System (CIPS) which allows worldwide transactions in yuan (RMB) – currently the world’s fourth most-used payment currency – with a view to bypassing SWIFT and questioning the dominance of the US Dollar, the Euro and the Yen.
“The CIPS is an important milestone in the internationalization of the yuan,” stressed Fan Yifei, PBC Deputy Governor. “CIPS will enhance China’s connectivity with the global financial system, providing a highly efficient platform for cross-border RMB settlement,” said Michael Vrontamitis, Head of Trade, Standard Chartered Bank.
Last month, the PBC took significant steps in order to facilitate the participation – through the China Foreign Exchange Trading System (CFETS) – of foreign central banks, international financial institutions, and sovereign wealth funds in the Chinese inter-bank Foreign Exchange (FOREX) market.
Unimpressed by the recent violent fluctuations of its national stock markets which followed the creation of the new AIIB, the Chinese government remains firmly committed to building its own world-class monetary policy.