China to set up its own Clearing House Interbank Payments System for renminbi

Shanghai to host China International Payments System


The China International Payments System (CIPS) will be established in Shanghai in 2014 and will help settle renminbi payments worldwide, reports Shanghai's China Business News.

Wu Jun, deputy director of the city's finance office, said that 2014 is a critical year as the structure for the CIPS would be finalized during that time.

Wu said that current cross-border renminbi settlements were being made through banks but that all transactions still had to be processed via a clearing system.

Citing the US dollar as an example, Wu explained that New York uses a clearing system called the Clearing House Interbank Payments System (CHIPS) to settle global transactions denominated in the US dollar. It handles 95% of international dollar payments, which has allowed New York to become an international financial center.

... global renminbi lending accounted for 8.66% of the market share as of October this year, outpacing the Euro for the first time to become the second largest clearing currency worldwide.

Read more: [link to www.wantchinatimes.com]