Rising Trend of China's Cross-Border Payments Network
In the dynamic world of cross-border payments, keeping an eye on global policy moves is crucial. One such initiative that has been piquing interest is China's Cross-border Interbank Payment System (CIPS), designed to facilitate cross-border renminbi (RMB) payments.
Launched by the People's Bank of China in 2015, CIPS allows financial institutions to settle payments with each other directly through a secure network in real-time. The system was created with the intention of internationalizing the yuan, and it is used for both outbound and inbound payments to China.
As of May 2025, CIPS had 1,683 participants, with the majority being indirect participants. Asia accounts for 73% of the share of indirect participants on CIPS, while Europe accounts for 17%. Fewer indirect participants are based in Africa (4%), North America (2%), South America (2%), and Oceania (1%).
In 2024, the total annual volume passing through CIPS rose by 43% to ¥175.49tn ($24.45tn). However, whether CIPS can substantially impact China's quest to internationalize the yuan remains uncertain due to its current lack of global scale.
To address this, CIPS has forged its first direct partnerships with six foreign banks in the Middle East and Africa in June. This move is seen as a step towards expanding CIPS' global reach.
CIPS' growth is also being influenced by its partnership with Swift, a global messaging network used for transactions in virtually every major currency, with over 11,500 institutions in more than 235 countries and territories. In June 2025, CIPS and Swift signed a memorandum of understanding to work together and improve CIPS' capabilities.
Swift's RMB tracker for June 2025 shows that the yuan only accounted for 3% of the share of currencies being used for global Swift payments. This underscores the potential for growth for CIPS in the global market.
The global migration to ISO 20022 standards is another factor enhancing cross-border payments. This standard facilitates more efficient and transparent transactions by providing richer data and improved tracking, as well as increased interoperability among financial systems.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has also been improving its services to support real-time tracking and more efficient payment processing. This is crucial for systems like CIPS.
As CIPS continues to challenge Western-based financial systems, it is essential to monitor regulatory updates, technological advancements, and strategic partnerships. By focusing on these areas, you can effectively track and understand the evolving landscape of cross-border payments, including initiatives like CIPS.
Sources: 1. Convera: https://www.convera.com/ 2. Tipalti: https://tipalti.com/ 3. SWIFT: https://www.swift.com/ 4. People's Bank of China: https://www.pbc.gov.cn/ 5. Belt and Road Initiative: https://www.beltandroad.org/ 6. ISO 20022: https://www.iso.org/iso-20022.html
The partnership between CIPS and Swift, two significant players in the global financial industry, is working towards improving CIPS' capabilities for cross-border payments, aiming to increase the yuan's share in the banking-and-insurance sector. The global migration to ISO 20022 standards is enhancing cross-border transactions, providing a platform for more efficient and transparent business dealings, thereby impacting the industry and finance landscape.
