Cross-border Interbank Payment System (CIPS) is a wholesale payment system dedicated to RMB cross-border payment and settlement, as approved by the People's Bank of China(hereinafter referred to as the "PBC"). Committed to providing secure, efficient, convenient and low-cost clearing and settlement services, CIPS serves as China’s critical financial market infrastructure (FMI).
CIPS (Phase I) went live in October 2015. CIPS (Phase II) was fully put into operation in May 2018. The development and operation of CIPS have always complied with unified international standards. With regard to system design and rules development, it strictly observes and implements requirements specified in relevant frameworks, including Principles for Financial Market Infrastructures and Core Principles for Systemically Important Payment Systems.
CIPS operates on a 5×24-hour plus 4-hour basis and supports a hybrid settlement model to meet the settlement needs of diverse payment businesses. For payment transactions initiated individually by direct participants, CIPS adopts Real-Time Gross Settlement (RTGS); for bulk payment transactions initiated by direct participants, CIPS adopts Deferred Net Settlement (DNS). Meanwhile, to accommodate settlement requirements of different financial transactions, CIPS supports a full range of cross-border RMB settlement business, including RMB remittance, Payment versus Payment (PvP) between RMB and foreign currency, Delivery versus Payment (DvP), Central Counterparty (CCP) settlement, and settlement for other cross-border RMB transactions.
The CIPS fund custodian bank arrangement is designed to serve overseas direct participants. Under this framework, eligible direct participants in the banking sector provide liquidity services related to CIPS accounts to overseas direct participants requiring such support, thereby facilitating their access to CIPS in a more secure and efficient manner.
