The Cross-Border Interbank Payment System (CIPS) is a financial market infrastructure operated by Cross-Border Interbank Payment System Co., Ltd., a company established under the supervision of the People's Bank of China (PBOC). It went live in October 2015 with a first phase covering RMB trade settlement, and a second phase launched in 2018 extended operating hours to near 24-hour coverage and added more direct participants.
CIPS provides clearing and settlement services for cross-border payments denominated in renminbi (RMB). It is often described as China's analogue to systems like CHIPS in the United States, though it is purpose-built for RMB internationalisation rather than a single domestic currency clearing role. CIPS uses ISO 20022 messaging standards, which differs from the legacy MT formats historically used by many correspondent banking flows.
A common misconception is that CIPS is a replacement for SWIFT. SWIFT is a messaging network; CIPS is a clearing and settlement system. In practice CIPS participants have used SWIFT for messaging alongside CIPS for clearing, although CIPS also offers its own messaging line. The two systems are complements more than substitutes, which limits CIPS's standalone utility as a sanctions-evasion tool.
CIPS has attracted geopolitical attention since 2022, when several Russian banks were disconnected from SWIFT following the invasion of Ukraine. Analysts examined whether CIPS could serve as an alternative rail for sanctioned entities. In practice, the system's direct participants remain dominated by Chinese banks and major international banks that themselves comply with U.S. and EU sanctions, constraining its usefulness for circumvention.
Key features delegates and researchers should know:
- Direct participants clear through their own CIPS accounts; indirect participants access CIPS via a direct participant.
- Volumes remain small relative to USD-clearing systems, though they have grown steadily.
- CIPS is central to discussions of RMB internationalisation, BRICS payment alternatives, and de-dollarisation debates.
Example
After Russian banks were cut off from SWIFT in 2022, commentators debated whether CIPS could route sanctioned trade flows, though most major foreign CIPS participants continued to honour Western sanctions.
Frequently asked questions
No. SWIFT is a messaging network, while CIPS is a clearing and settlement system for RMB. Many CIPS participants still rely on SWIFT for messaging, so the two are largely complementary.
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