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44-554: The first transaction on the SPFS network involving a non-bank enterprise was executed in December 2017. In March 2018, over 400 institutions (mostly banks) were part of the network. Compared to SWIFT, the system initially faced a number of challenges, especially higher transaction costs though in March 2018 transaction fee was radically reduced to 0,80–1,00 ₽ (0.012–0.015 $ ) per transaction. As of 2018

88-460: A daily basis, the system processed 25,900 transactions, totaling RMB482.602 billion($ 67.028 billion). As of October 2024, CIPS has 160 Direct Participants and 1413 Indirect Participants. Among Indirect Participants, 1051 participants are from Asia (including 560 from Chinese Mainland), 244 from Europe, 53 from Africa, 25 from North America, 20 from Oceania, and 20 from South America. CIPS participants are located in 117 countries and regions around

132-403: A monthly basis. This data covers BIC , LEI , national bank codes , IBAN data, standing settlement instructions, credit ratings, and financial institutions’ memberships to domestic and cross-border payment market infrastructures. After the launch of CIPS (phase 1), its functions have been steadily improved, leading to its operation (phase 2). On 26 March 2018, CIPS (phase 2) was launched on

176-656: A pilot basis, with 10 direct participants. On 2 May 2018, CIPS (phase 2) was fully operational with other qualified direct participants. On 9 October, CIPS (phase 2) implemented the Delivery Versus Payment (DVP) settlement and supported Northbound Trading of Bond Connect, which would reduce settlement risks and improve the efficiency of cross-border bond transactions. By the end of 2019, CIPS had 33 direct and 903 indirect participants (from 94 countries and regions) with an increase of 74% and 413% compared to 2015, respectively. Through these direct and indirect participants,

220-553: Is among the responses to sanctions imposed by the United States , which commentators view as contributing to de-dollarization . People%27s Bank of China The People's Bank of China (officially PBC and unofficially PBOC ) is the central bank of the People's Republic of China . It is responsible for carrying out monetary policy as determined by the People's Bank Law and

264-537: Is backed by the People's Bank of China and was launched in 2015 as part of a policy effort to internationalize the use of China’s currency. In 2022, CIPS processed around 96.7 trillion yuan ($ 14.03 trillion), with about 1427 financial institutions in 109 countries and regions having connected to the system. In 2023, the CIPS processed 6.6133 million transactions, totaling RMB123.06 trillion($ 17.09 trillion), increasing by 50.29 percent and 27.27 percent y-o-y, respectively. On

308-1007: Is required to implement the policies of the Chinese Communist Party (CCP). It operates under the direction of the CCP's Central Financial Commission . The CCP committee secretary of the PBC is the most powerful position in the bank and can hold more sway than the governor. The current CCP committee secretary is Pan Gongsheng. The PBC has branches in each 31 provincial-level administrative divisions in China, branches in five cities (Shenzhen, Dalian, Ningbo, Qingdao, and Xiamen), and 317 branches in prefecture-level divisions . It has 6 overseas representative offices (PBC Representative Office for America, PBC Representative Office (London) for Europe, PBC Tokyo Representative Office, PBC Frankfurt Representative Office, PBC Representative Office for Africa, Liaison Office of

352-433: Is the information exchange component between CIPS Direct/Indirect Participants and their institutional clients, and the application carrier of CIPS Standard. CIPS participants are divided into two types: direct participants and indirect participants. Direct participants open an account in the CIPS, and directly send and receive messages through the CIPS, while indirect participants have indirect access to services provided by

396-608: The Bank of China (BOC). The People's Construction Bank of China , which had been run separately under the Ministry of Finance, was also made autonomous (and later renamed China Construction Bank in 1986). In January 1984, the PBC's own commercial banking operations were spun off as the Industrial and Commercial Bank of China (ICBC). In September 1983, the State Council had promulgated that

440-651: The Reserve Bank of India and Russia's Vnesheconombank . According to the same data, the system will be put into operation within a week. In April 2022, Russian Central Bank governor announced that most Russian financial institutions and 52 foreign organizations from at least 12 countries were successfully integrated with the SPFS. On January 16, 2024, First Deputy Chairman of the Russian Central Bank announced that in Q3 2023 four more countries were connected to SPFS bringing

484-624: The State Council approved the consolidation of PBC's headquarters as a bureau within the Ministry of Finance . In that context, the PBC's head office was downsized to no more than eighty staff. Local PBC branches were correspondingly merged into local government finance departments. The institutional demotion of the PBC was reversed in March 1978 as it was separated from the Finance Ministry and granted ministerial ranking. By then and with

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528-542: The president .The deputy governors of the PBC are appointed to or removed from office by the premier. The PBC adopts the governor responsibility system under which the governor supervises the overall work of the PBC while the deputy governors provide assistance to the governor to fulfill his or her responsibility. The current governor is Pan Gongsheng . Deputy governors of the management team include: Zhu Hexin , Zhang Qingsong , Xuan Changneng , Lu Lei , and Tao Ling . The PBC does not have central bank independence and

572-662: The special drawing rights (SDR). In March 2016, SWIFT and CIPS signed a memorandum of understanding (MOU). With the ISO 20022 standard already adopted by CIPS for its payment system, SWIFT went through the implementation process of the standard that can allow the use of Chinese characters, in addition to its richer content functionalities. In September 2017, as one of the MOU's plans signed between SWIFT and CIPS, reference data indicating financial institutions’ direct and indirect participation in CIPS will be published via SWIFTRef and updated on

616-490: The CIPS through direct participants. As of July 2024, CIPS has 150 Direct Participants and 1401 Indirect Participants. Among Indirect Participants, 1047 participants are from Asia (including 565 from Chinese Mainland), 239 from Europe, 52 from Africa, 24 from North America, 22 from Oceania, and 17 from South America. CIPS participants are located in 117 countries and regions around the world. Business covers more than 4,700 banking institutions in 184 countries and regions around

660-493: The Commercial Bank Law. The PBC was established in 1948 and became China's sole central bank after the founding of the People's Republic of China in 1949. From 1969 to 1978, the PBC was demoted to a bureau of the Ministry of Finance . The PBC was extensively reformed during the 1990s, when its provincial and local branches were abolished, instead opening nine regional branches. In 2023, these reforms were reversed as when

704-675: The PBC elevated its branch in Shanghai to the status of "second head office", in a move intended to mirror the prominent market-facing role of the Federal Reserve Bank of New York within the US Federal Reserve System . In 2006, the PBC established the Credit Reference Centre to provide financial credit reporting. In 2008, the PBC lost the direct ownership stakes it had built up in much of China's financial sector as

748-457: The PBC had 1,761 such branches at the end of 2021. The PBC is a cabinet -level executive department of the State Council . The top management of the PBC are composed of the governor and a certain number of deputy governors. The governor is nominated by the premier of the State Council , who is then approved by the National People's Congress or its Standing Committee and appointed by

792-434: The PBC had to reluctantly concede the spinning off of its securities regulatory duties to the newly established China Securities Regulatory Commission , whose first chair was former PBC vice governor Liu Hongru . The bank's profile was greatly raised by the appointment of Zhu Rongji as its Governor in 1993, simultaneously as his role as Vice Premier in charge of economic and financial affairs. . Its central bank status

836-479: The PBC in the Caribbean Development Bank). The PBC Monetary Policy Committee is an advisory body chaired by the PBC governor. It typically includes the directors and deputy directors of other financial agencies, as well as a few influential academic economists. As of 2019 , the PBC consisted of functional departments (bureaus) as below: The following enterprises and institutions were directly under

880-403: The PBC initiated supervision of significant financial holding companies . The PBC underwent through another major restructuring in 2023, with the abolition of the nine regional branches established in 1998, which had already seen their authority watered down by a change in 2004 that had returned authority to the PBC's branches at the provincial level and further changes in 2018. Additionally,

924-482: The PBC opened nine regional branches, whose boundaries did not correspond to local administrative boundaries. The nine branches were located in Chengdu , Guangzhou , Jinan , Nanjing , Shanghai , Shenyang , Tianjin , Wuhan , and Xi'an , complemented by a sub-provincial network of city-level and county-level sub-branches. That same year, the so-called credit plan, a key feature of China's former state planning process,

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968-556: The PBC would function exclusively as the central bank of China and no longer undertake commercial banking activities. Modernization efforts continued in the late 1980s and early 1990s. In 1990, the PBC moved into its new head office building, prominently located on West Chang'an Avenue . In 1991, vice governor Chen Yuan spearheaded the creation of the Electronic Interbank System (EIS), the PBC's first state-of-the-art financial market infrastructure . In 1992, however,

1012-455: The PBC's county-level branches were absorbed by city-level branches. The new branches were inaugurated on August 18, 2023. The oversight over financial holding companies and financial consumer protection was also transferred from the PBC to the newly established National Financial Regulatory Administration (NFRA). Around 1,600 county-level branches of the PBC are planned to be absorbed to the NFRA;

1056-515: The Russian and Chinese financial messaging systems. He also pointed to the beginning of the development of information transfer schemes using blockchains, including the digital ruble and the digital yuan. On March 31, 2022, The Economic Times published information that the Indian government has offered Russia a new transaction system with the transfer of trade to the ruble and SPFS, which will work through

1100-506: The SWIFT industry standard for syntax in financial messages. Messages formatted to SWIFT standards can be read and processed by many well-known financial processing systems, whether or not the message traveled over the SWIFT network. SWIFT cooperates with international organizations to define standards for message format and content. CIPS also subscribes to registration authority (RA) for the following ISO standards: In RFC 3615 urn:swift :

1144-638: The countries inside the EAEU who are planning to use SPFS directly. At the end of 2020, there were 23 foreign banks connected to the SPFS from Armenia , Belarus , Germany , Kazakhstan , Kyrgyzstan and Switzerland . On March 17, 2022, Anatoly Aksakov , Chairman of the State Duma Committee on the Financial Market , announced that the Bank of Russia and the People's Bank of China were working on connecting

1188-640: The creation of Central Huijin Investment , a PBC-managed fund that allowed the PBC to take the lead from the Ministry of Finance on the restructuring process and from the CCP Central Organization Department on the appointment of senior bank executives. That same year, however, the PBC reluctantly lost its direct authority over banking supervision with the creation of the China Banking Regulatory Commission . In 2005,

1232-539: The exception of special allocations for rural development, the monolithic PBC dominated all business transactions and credit. In 1979, China initiated a transition from that single-tier banking system to a two-tier system, which was largely completed by 1984. In March 1979, as part of the Chinese economic reforms , the State Council split off state-owned banks from the PBC, first the Agricultural Bank of China (ABC) and

1276-564: The first Five Year plan from 1955 to 1959 the PBC had complete control of the private banks, making them branches of the PBC, closely resembling the vision of Vladimir Lenin . With aid from the Soviet Union , the shares of private enterprises and with them industrial output followed a similar path, forming a Soviet-style planned economy . During the Cultural Revolution , the PBC suspended its commercial banking service. In June 1969,

1320-601: The legal status of online third-party payment platforms like Alipay . Prior to the 2010 measures, these services existed in a legal grey area. In 2015, the PBC hosted China's first formal deposit insurance scheme. In 2019, this scheme was reorganized as a subsidiary of the PBC, the Deposit Insurance Fund Management Company. Meanwhile, in 2017, the PBC was tasked with the secretariat of China's newly established Financial Stability and Development Committee chaired by Vice Premier Liu He . In 2020,

1364-419: The network of CIPS has reached 3000+ banking institutions in 167 countries and regions. By the end of 2019, 1017 banking institutions from 59 BRI countries and regions (including mainland China, Hong Kong SAR, Macao SAR, and Taiwan) ran their business via CIPS. In 2021, CIPS processed around 80 trillion yuan ($ 12.68 trillion), with about 1280 financial institutions in 103 countries and regions having connected to

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1408-657: The ownership of Central Huijin was transferred to the China Investment Corporation (CIC), a newly created sovereign wealth fund . During the Great Recession , the PBC helped address bank liquidity crisis by signing swap agreements with numerous other countries to provide them with liquidity based on the renminbi . As of 2021 , China has swap agreements with 40 countries. In 2010, the PBC issued administrative measures regarding online non-financial payment services . These measures retroactively recognized

1452-519: The party's Central Financial Commission . The PBC is led by a Governor assisted by several Deputy Governors and a CCP Committee Secretary . Since 2023, the roles of Governor and CCP Committee Secretary have been held jointly by Pan Gongsheng . The bank was established on December 1, 1948, based on the consolidation of the Huabei Bank, the Beihai Bank and Northwestern Farmers' Bank. The headquarters

1496-406: The regional branches were abolished and the provincial branches restored, and new arrangements essentially ended the PBC's longstanding role in financial supervision . The PBC is the 25th-ranked of 26 ministerial-level departments of the State Council . The PBC lacks central bank independence and is required to implement the policies of the Chinese Communist Party (CCP) under the direction of

1540-520: The system after the issuance of this alert will be subject to aggressive targeting, and foreign financial institutions should also be cautious of their exposure to other institutions participating in SPFS, which could be helping Russia evade US sanctions. Cross-Border Inter-Bank Payments System The Cross-border Interbank Payment System ( CIPS ) is a Chinese payment system that offers clearing and settlement services for its participants in cross-border renminbi (RMB) payments and trade. CIPS

1584-745: The system worked within the Russian Federation though there were plans to integrate the network with the China-based Cross-Border Inter-Bank Payments System . The Russian Government was also in talks to expand SPFS to developing countries such as Turkey and Iran . As of 2018, owing to its limitations, the SPFS system was seen as a last resort, rather than as a full replacement for the SWIFT network. Since 2019 many agreements have been reached to link SPFS to other countries' payment systems in China , India , Iran, as well as

1628-552: The system. In 2022, CIPS processed around 96.7 trillion yuan ($ 14.03 trillion), with about 1427 financial institutions in 109 countries and regions having connected to the system. In 2023, the CIPS processed 6.6133 million transactions, totaling RMB123.06 trillion($ 17.09 trillion), increasing by 50.29 percent and 27.27 percent y-o-y, respectively. On a daily basis, the system processed 25,900 transactions, totaling RMB482.602 billion($ 67.028 billion). CIPS relies on SWIFT 's messaging service for over 80% of its transactions. It uses

1672-497: The total count to 20, along with 550 organizations of which 150 were from 16 foreign countries. As summarized by academic Tim Beal, SPFS is among the responses to sanctions imposed by the United States viewed by commentators as contributing to dedollarization . The US authorities consider SPFS as a system created to help diminish the effects of sanctions imposed on Russian entities and individuals. In an alert issued on November 21, 2024, they made clear that institutions that join

1716-462: The world. CIPS has Chinese and international shareholders. The People's Bank of China is the largest shareholder with 16 percent of equity; others include the NAFMII , UnionPay , and the large state-owned Chinese banks. Foreign shareholders include HSBC , Standard Chartered , Bank of East Asia , DBS Bank , Citigroup , ANZ Banking Group , and BNP Paribas . As academic Tim Beal summarizes, CIPS

1760-691: The world. Business covers more than 4,700 banking institutions in 185 countries and regions around the world. In 2012, the PBOC launched the construction of CIPS (phase 1). On 8 October 2015, CIPS (phase 1) was put into operation, with 19 direct participants and 176 indirect participants from 50 countries and regions across 6 continents. The launch of CIPS was another milestone in the construction of China's financial market infrastructure , which marked vital progress in developing China's modern payment system that integrated domestic, and overseas payments of RMB. CIPS significantly facilitated RMB being officially included in

1804-437: Was defined as Uniform Resource Names (URNs) for SWIFT FIN. The main functions of the CIPS is to facilitate the processing of cross-border RMB business and to support the settlement of cross-border trade in goods and services, cross-border direct investment, cross-border financing, and cross-border individual remittance. Based on the message scheme of ISO20022 , and compatible with the current CIPS standards, CIPS Connector

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1848-574: Was finally abandoned, allowing the PBC to play a genuine role as monetary policy authority. In 2003, the Standing Committee of the National People's Congress approved an amendment law for strengthening the role of PBC in the making and implementation of monetary policy for safeguarding the overall financial stability and provision of financial services. That year, the long overdue restructuring of China's banking sector made major progress with

1892-562: Was first located in Shijiazhuang , Hebei , and then moved to Beijing in 1949. Between 1950 and 1978 the PBC was the only bank in the People's Republic of China and was responsible for both central banking and commercial banking operations. All other banks within mainland China such as the Bank of China were either organized as divisions of the PBC or were non-deposit taking agencies. From 1952 to 1955 government shares were added to private banks to make state-private banks, until under

1936-402: Was legally confirmed on March 18, 1995, by the 3rd Plenum of the 8th National People's Congress , and was granted a higher degree of autonomy than other State Council ministries by an act that year. In 1996 and 1996, the PBC established fundamental regulations on loans and consumer credit. In 1998, the PBC underwent a major restructuring. All provincial and local branches were abolished, and

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