CIPS (Cross-Border Interbank Payment System) is China's financial market infrastructure for clearing and settling cross-border and offshore payments in the renminbi (RMB). It began operating on 8 October 2015 and is run by CIPS Co., Ltd. in Shanghai, with the People's Bank of China (PBoC) as its supervisor. Banks around the world use it to send and receive RMB payments for trade, investment and financial market transactions.
CIPS settles only renminbi. It is sometimes described as a Chinese alternative to SWIFT, but the comparison is inexact: SWIFT is a messaging network for payments in any currency, while CIPS is a clearing and settlement system for a single currency, more comparable in function to CHIPS for the US dollar.
Background
China began promoting cross-border RMB settlement in 2009. At first, cross-border RMB payments were handled by designated RMB clearing banks in offshore centers such as Hong Kong and Singapore, or through correspondent accounts held with banks in mainland China, then settled in the domestic China National Advanced Payment System (CNAPS). That arrangement was fragmented, operated only during Chinese business hours and relied on domestic message formats. CIPS was built to give RMB a dedicated international infrastructure with standardized messaging and longer operating hours.
The first phase, launched in 2015, used real-time gross settlement. A second phase in 2018 added deferred net settlement for greater liquidity efficiency and extended operating hours to cover time zones in Asia, Europe, Africa, Oceania and the Americas.
How CIPS works
CIPS has two tiers of members. A direct CIPS participant holds an account in CIPS, connects to the system directly and settles payments in its own name. An indirect CIPS participant accesses CIPS through a direct participant, in the same way that a bank without a US presence uses a correspondent for dollar clearing. Direct participants fund their CIPS accounts with liquidity transferred from CNAPS, and payments are settled either individually in real time or in netted batches.
The system uses messages based on the ISO 20022 standard and supports both Chinese and English characters. Many CIPS payments, particularly those involving indirect participants abroad, still begin or end as SWIFT messages, and CIPS and SWIFT have cooperated on message conversion. CIPS also offers its own messaging connections for participants that choose to use them.
Relationship with onshore and offshore RMB
Payments through CIPS settle in onshore RMB (CNY) accounts within the Chinese system, while trading in the offshore RMB (CNH) market takes place outside the mainland. Cross-border flows remain subject to China's foreign exchange and capital-account rules administered by the State Administration of Foreign Exchange (SAFE) and the PBoC, so CIPS does not in itself make the RMB freely convertible. Conditions in the two markets show up in the CNY-CNH spread.
Geopolitical significance
CIPS has drawn attention as part of efforts to reduce dependence on dollar-based infrastructure and on networks exposed to Western sanctions, especially after several Russian banks were disconnected from SWIFT in 2022. Its participant numbers and volumes have grown, but RMB remains a small share of global payments compared with the US dollar and the euro. Banks dealing with sanctioned parties through CIPS can still face secondary sanctions risk, because the system's existence does not change the reach of US or EU sanctions over the banks involved. It is one of several SWIFT alternatives discussed in policy debates, alongside the PBoC's work on the e-CNY. For the central bank's profile, see the People's Bank of China regulator profile.