China officially announces the launch of a strategic plan to impose its own international payment system called the “Cross-Border Interbank Payment System” (CIPS). This initiative marks an important shift in the redefinition of global financial flows, reinforcing China's ambition for a multipolar economic order.
The Cross-Border Interbank Payment System (CIPS) is a Chinese financial infrastructure designed to facilitate cross-border payments in renminbi (RMB). Its objective is to promote the internationalization of RMB and enhance its use in international trade and investment. CIPS provides clearing and settlement services to financial institutions that conduct cross-border transactions in RMB.
RMB is the official currency of China called Renminbi. Its meaning is: "people's currency". Its basic unit is the yuan (CNY) and both terms are used interchangeably. That is, 5RMB is the same as 5 ¥ (0.68 US$). The currency symbols are ¥ and 元.
In summary:
1. China officially unveils an ambitious plan to promote its own international payment system.
2. Shanghai becomes the nerve center of the development of the CIPS network, a direct alternative to SWIFT.
3. Beijing seeks to strengthen the use of yuan in cross-border exchanges and support its companies abroad.
4. The project aims to reduce the BRICS' dependence on the US dollar and consolidate their financial autonomy.
5. Beijing accelerates the promotion of its international payment system
6. The municipal government of Shanghai, with the support of the People's Bank of China (PBoC), has officially launched an ambitious plan to increase the use of yuan in cross-border transactions.
This plan "seeks to develop an independent international payment system" relying on the Cross-Border Interbank Payment System (CIPS), a network that already has more than 1,300 financial institutions spread across 110 countries. Its goal: "To increase the internationalization of the yuan and support the expansion of Chinese companies abroad."
Finally, CIPS is presented as a credible alternative to SWIFT, which has so far dominated the international payment sector as is the case with the BRICS and other nations, among which we can list the following alternatives:
1. The strengthening of CIPS to promote direct cross-border payments in yuan.
2. The optimization of multinational financial services, especially in Shanghai, to facilitate trade exchanges.
3. The support for Chinese companies abroad, in order to offer them alternative financing and payment solutions to the US dollar.
4. A reduction in dependence on the SWIFT network and thus decrease exposure to external financial pressures.