China’s international payment system, which should increase global use of the yuan by reducing transaction costs and processing times, will be launched before the end of 2015.
The China International Payment System (CIPS) has been completed, three sources told Reuters, and could be launched as early as September or October. China has selected 13 Chinese banks and seven foreign subsidiaries to test the new system, a source added.
The launch of CIPS will allow companies outside the country to directly clear yuan transactions with Chinese companies.
Cross-border yuan clearing currently takes place through an offshore yuan clearing bank in the likes of Hong Kong, Singaporte or London, or with the help of a correspondent bank in mainland China.
The system was originally geared for launch in 2014 but came across technical problems. But a 2015 launch would come ahead of market expectations, which did not see CIPS launching until 2016.
China’s yuan became one of the world’s top five payment currencies in November 2014. Last year the Chinese government made moves to take advantage of the growth in the currency’s use by assigning 10 additional yuan clearing banks, bringing the official global number to 14.
The People’s Bank of China has yet to comment on the matter, Reuters reported.
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