The China International Payments System (CIPS) is meant to replace a plethora of networks and ensure hassle-free yuan payments in China. However, according to recent reports, the debut of the CIPS was delayed due to technical issues and policy roadblocks.
According to Reuters, an efficient global network for yuan trades will be essential for fulfilling Beijing’s wish to boost the currency’s use. However, bankers state that the nation’s government debating over how much users should be allowed to move in a single day – without creating too big of a dent in China’s capital controls and technological problems – have slowed the system’s development.
“The central bank is telling others that the first batch of CIPS will be used this year, but we think it is unlikely,” a banker at a large Chinese bank, according to the news source. “The earliest will be 2016.”
Even so, most bankers believe the new international network will one day become a major long-term alternative to clearing banks and offshore centers. Chinese bankers told the news source that the central bank is trying to assure them that the planned global network will not hinder their renminbi business. However, when one banker was asked if offshore yuan clearing centers would also become obsolete when CIPS goes live, he said the new system will provide “alternative channels” for yuan payments.
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