China’s CIPS: A Potential Alternative in Global Financial Order

Emily Jin, research assistant at Center for New American Security and co-author of “China’s Digital Currency: Adding Financial Data to Digital Authoritarianism” discusses CIPS in a conversation with Mercy Kuo from The Diplomat.

Explain China’s Cross-Border Interbank Payment System (CIPS).

China’s Cross-Border Interbank Payment System (CIPS) is a payment pipeline that clears and settles domestic and cross-border RMB transactions. While it can facilitate RMB transactions between Chinese Mainland institutions and between Mainland and Hong Kong institutions, it needs to be connected to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to communicate with international financial institutions. It is therefore dissimilar to SWIFT, unlike many comparisons suggest, and more like the United States’ Clearing House Interbank Payments System (CHIPS), which clears and settles U.S. dollar transactions.

Read the full interview from The Diplomat.