Abstract On October 8, the central bank issued an announcement indicating that the first phase of the RMB cross-border payment system (CIPS) was successfully put into operation. This system, known as the internationalization of the renminbi on the "highway", will provide for the cross-border liquidation of the renminbi in the future...
On October 8, the central bank issued an announcement indicating that the first phase of the RMB cross-border payment system (CIPS) was successfully put into operation. This system, known as the internationalization of the renminbi on the "highway", will facilitate the cross-border liquidation of the renminbi in the future. Cross-border liquidation efficiency has increased dramatically
CIPS can provide funds clearing and settlement services for RMB cross-border and offshore business of domestic and foreign financial institutions, and is an important financial infrastructure. The system is built in two phases as planned. The first phase facilitates cross-border RMB business processing and supports cross-border trade in goods and services, clearing cross-border direct investment, cross-border financing and cross-border personal remittances. The second phase will adopt a more liquidity-based mixed settlement method to improve the liquidation and settlement efficiency of RMB cross-border and offshore funds.
According to the central bank, CIPS (Phase I) will use real-time full settlement to handle customer remittances and financial institution remittances. Each direct participant accesses a little, centralizes the clearing business, shortens the clearing path, and improves the efficiency of liquidation. It also adopts the international standard ISO20022 message standard, which facilitates the cross-border business direct processing of participants. The operation time covers major time zones of RMB business in Europe, Asia, Africa, Oceania, etc., and provides private line access for direct participants in China.
Wei Kai, deputy governor of Deutsche Bank (China) Co., Ltd., said that the system will significantly improve cross-border clearing efficiency and meet the steady growth of RMB demand around the world.
An important milestone in the internationalization of the RMB
“The establishment of this system is an important milestone in the internationalization of the RMB, and the existing RMB cross-border clearing model will continue to play a role based on market demand.†The central bank spokesman said that the RMB has become China’s second largest cross-border payment currency and global The fourth largest payment currency. The demand for RMB cross-border payment settlement has grown rapidly, and the requirements for financial infrastructure are getting higher and higher. HSBC expects that by 2020, more than half of China's foreign trade will be settled in RMB, and the RMB will rank among the world's major currencies.
“The CIPS system is equivalent to connecting the global RMB users through a 'paying highway'.†Huang Bijuan, chief executive of HSBC Greater China, said that in recent years, with the rapid growth of cross-border RMB business, more and more markets Participants hope to gain better support in terms of trading time, language, risk and liquidity management through a cross-border RMB clearing system that adopts internationally accepted standards. The new system will be built to meet the needs of the market, and will further promote the use of the renminbi globally, paving the way for becoming a truly global currency.
The central bank said that the first batch of CIPS system participants consisted of 19 Chinese banks, including not only the five major state-owned banks, but also eight foreign banks including HSBC, Citigroup, Standard Chartered and Deutsche. In addition, indirect participants on the same line include 38 domestic banks and 138 overseas banks in Asia, Europe, Oceania and Africa.
RMB internationalization event
On October 8, 2015, the first phase of the RMB cross-border payment system (CIPS) was successfully put into operation.
On August 11, 2015, the central bank announced that it would further improve the quotation of the RMB exchange rate.
In November 2014, the RMB qualified domestic institutional investor (RQDII) business officially opened.
On October 14, 2014, the first batch of 21 finance ministers and authorized representatives including China, India and Singapore signed a contract to jointly establish an AIIB.
On September 29, 2013, the Shanghai Free Trade Zone was established. The financial innovation system aimed at the capital account convertibility and the opening of the financial services industry was basically established, and the degree of internationalization of the RMB was greatly accelerated.
In December 2012, the cross-border RMB loan business in Shenzhen Qianhai District was officially launched.
In August 2011, the cross-border trade settlement of RMB was extended to the whole country.
In June 2010, the overseas settlement of cross-border trade renminbi was extended to all countries and regions.
In July 2009, the trial of cross-border trade RMB settlement was officially launched.
In June 2007, the first RMB bond landed in Hong Kong.
The future of the renminbi will be more convenient in cross-border payments.
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