China's international payment system (CIPS) may be launched in September or October, reports Reuters, citing sources familiar with the situation.
The system, which will make payments in RMB worldwide, would replace a number of existing systems and significantly increase the level of use of the Chinese currency, what would be very important for Beijing, the agency says. Its launch will allow companies outside of China to work with Chinese colleagues directly, reducing the number of steps of payments.
"CIPS system is ready, and China chose 20 banks to conduct tests. Among these 13 banks are Chinese and the rest - subsidiaries of foreign banks. The official launch of the system will take place in September or October, depending on the results of tests and training," - said one of the Agency’s sources.
Another source said that the Chinese government intends to launch the first part of the payment system until December. "It's not a plan, but we do our best to run the first part of CIPS before the end of this year," - he said. The source noted that if all goes well, the launch of the system would take place in September or October. He was confident that the system would be launched before the end of the year.
Representatives of the People's Bank of China did not comment on reports about the launch of CIPS.
Bankers argue that the discussion of the government's allowable volume of transactions per user per day (without creating too severe restrictions on the movement of capital and technical problems) slowed the launch platform. Let’s recall that CIPS was expected to launch in April, 2014, but abovementioned circumstances served as an obstacle.
Vast majority of international bankers are also confident that the new international network will be the main long-term prospect of clearing banks and offshore centers. According to the source, China central bank is assuring that the new global system will not hinder the development of their business in RMB.
In November 2014, the Chinese yuan has become one of the five leading payment rates, ahead of the Canadian dollar and the Australian dollar, according to calculations organization SWIFT. As Franck de Praetere, head of Asia-Pacific Management SWIFT payments and commodity markets, said, “Yuan is undoubtedly one of the best currencies to trade globally, and especially in Azia".
Later in 2015, China will try to achieve the inclusion of the yuan in the basket of key international currencies, which is served to calculate the cost of special drawing rights (SDR) of the IMF. Perhaps, China's G20 partners can go to meet him, taking into account the growing demand for the yuan in international payments. SDR (artificial backup and means of payment issued by the IMF) now includes dollar, euro, Japanese yen and British pound. The structure of the basket is reviewed every five years and the last time was in 2010. The main argument against the inclusion of the renminbi is that Chinese currency mismatches to criteria of free circulation, but with the increase in the share of the yuan in international payments, this argument may gradually come to naught.
It should be noted that in the context of growing demand for its own payment systems and the constant criticism towards international payment services, such as Visa or Mastercard, national payment systems are a reliable basis for payments. They allow to store all the information about users and conducted operations in the country and not to transfer them to foreign companies. Recent international events have confirmed how important this moment is.
The system, which will make payments in RMB worldwide, would replace a number of existing systems and significantly increase the level of use of the Chinese currency, what would be very important for Beijing, the agency says. Its launch will allow companies outside of China to work with Chinese colleagues directly, reducing the number of steps of payments.
"CIPS system is ready, and China chose 20 banks to conduct tests. Among these 13 banks are Chinese and the rest - subsidiaries of foreign banks. The official launch of the system will take place in September or October, depending on the results of tests and training," - said one of the Agency’s sources.
Another source said that the Chinese government intends to launch the first part of the payment system until December. "It's not a plan, but we do our best to run the first part of CIPS before the end of this year," - he said. The source noted that if all goes well, the launch of the system would take place in September or October. He was confident that the system would be launched before the end of the year.
Representatives of the People's Bank of China did not comment on reports about the launch of CIPS.
Bankers argue that the discussion of the government's allowable volume of transactions per user per day (without creating too severe restrictions on the movement of capital and technical problems) slowed the launch platform. Let’s recall that CIPS was expected to launch in April, 2014, but abovementioned circumstances served as an obstacle.
Vast majority of international bankers are also confident that the new international network will be the main long-term prospect of clearing banks and offshore centers. According to the source, China central bank is assuring that the new global system will not hinder the development of their business in RMB.
In November 2014, the Chinese yuan has become one of the five leading payment rates, ahead of the Canadian dollar and the Australian dollar, according to calculations organization SWIFT. As Franck de Praetere, head of Asia-Pacific Management SWIFT payments and commodity markets, said, “Yuan is undoubtedly one of the best currencies to trade globally, and especially in Azia".
Later in 2015, China will try to achieve the inclusion of the yuan in the basket of key international currencies, which is served to calculate the cost of special drawing rights (SDR) of the IMF. Perhaps, China's G20 partners can go to meet him, taking into account the growing demand for the yuan in international payments. SDR (artificial backup and means of payment issued by the IMF) now includes dollar, euro, Japanese yen and British pound. The structure of the basket is reviewed every five years and the last time was in 2010. The main argument against the inclusion of the renminbi is that Chinese currency mismatches to criteria of free circulation, but with the increase in the share of the yuan in international payments, this argument may gradually come to naught.
It should be noted that in the context of growing demand for its own payment systems and the constant criticism towards international payment services, such as Visa or Mastercard, national payment systems are a reliable basis for payments. They allow to store all the information about users and conducted operations in the country and not to transfer them to foreign companies. Recent international events have confirmed how important this moment is.