On May 2, 2018, after the successful pilot operation on March 26, the Phase 2 of RMB Cross-border Interbank Payment System (CIPS) was fully launched, with eligible direct participants engaged online simultaneously. CIPS, as an important financial infrastructure developed in line with international standards, provides fund clearing and settlement services to domestic and foreign participants in cross-border RMB businesses, serving as a “highway” for RMB internationalization. As of the end-March 2018, a total of 31 domestic and foreign direct participants, as well as 695 domestic and foreign indirect participants have joined CIPS expanding its actual business scope to 148 countries and jurisdictions.
Compared with CIPS (Phase 1), the functions and characteristics of CIPS (Phase 2) have been further improved in the following aspects. Firstly, the operating hours of CIPS have extended from 5×12 to 5×24+4 hours, basically covering the working hours of all financial markets in every time zone around the globe. Secondly, deferred net settlement (DNS) has been introduced as a supplement to the real-time gross settlement (RTGS) so as to meet diversified demands of CIPS participants and to facilitate cross-border e-commerce. Thirdly, the design of business modes not only conforms to international standards, but also enables future demand of further expansion to get ready for fund settlements of various financial transactions. Fourthly, with the introduction of financial infrastructure entities as its direct participants, the categories of CIPS participants have been expanded. Fifthly, CIPS (Phase 2) has been capable of supporting more foreign direct participants and is ready to incorporate more eligible foreign institutions. After adjustment, the operating hours of CIPS (Phase 2) at night overlap with European and US financial markets. To meet the domestic and foreign direct participants’ demand for liquidity adjustment at night and to ensure secured payment and clearing, the PBC has decided to add a night session for the inter-bank money market.
The launch of CIPS is a milestone in financial market infrastructure development in China, signaling a remarkable progress in building a modern payment system that supports both domestic and cross-border RMB payments. In the future, CIPS will continue to upgrade its services and functions based on demands of the market and requests of RMB internationalization so as to provide essential security and support for the global use of RMB and to facilitate cross-border financial market connectivity around the globe.
