China is rapidly expanding its Cross-border Interbank Payment System (CIPS), welcoming more financial institutions from Africa, Central Asia, and the Middle East as part of its wider effort to internationalize the yuan and reduce reliance on the U.S. dollar.
During a recent ceremony in Shanghai, six new institutions officially joined CIPS as direct participants: the African Export-Import Bank, First Abu Dhabi Bank, South Africa’s Standard Bank, Singapore’s United Overseas Bank, Eldik Bank of Kyrgyzstan, and Chongwa (Macau) Financial Asset Exchange. The expansion marks a significant milestone in China’s strategic effort to offer a viable alternative to the SWIFT system, which dominates global financial messaging.
Launched in 2015, CIPS aims to facilitate yuan-denominated cross-border transactions, especially amid rising geopolitical and trade tensions with the United States. As of May 2025, the system hosts 174 direct participants, primarily Chinese institutions and the China-based arms of major international banks such as HSBC, JP Morgan, and Citibank. Direct participants can send transactions independently via CIPS, unlike indirect users who rely on intermediaries.
In 2024, CIPS processed 175 trillion yuan ($24.4 trillion) in transactions, reflecting a 43% year-on-year increase. Beijing is accelerating efforts to scale the system’s reach amid fears that the U.S. may use its financial dominance as a geopolitical weapon. This concern has been heightened following the exclusion of major Russian banks from SWIFT in the wake of the Ukraine war.
Pan Gongsheng, Governor of the People’s Bank of China, addressed the issue during the Lujiazui Forum in Shanghai. Without naming countries, he warned that escalating geopolitical tensions risk the weaponization of traditional payment systems and called for a more diversified and resilient global infrastructure.
While the yuan remains far behind the dollar in global influence, accounting for just 2.9% of transactions on SWIFT in May and 2.18% of global forex reserves as of end-2024, the Chinese central bank views CIPS as a step towards greater financial sovereignty. By contrast, the U.S. dollar accounted for 48.5% of SWIFT payments and 57.8% of forex reserves.
“The dominance of a single currency in global transactions is beginning to shift,” Pan said, highlighting growing interest in local currency trade arrangements. He added that China has now built a “preliminary cross-border yuan payment system with multiple channels and broad international coverage.”
In line with these ambitions, China’s central bank and the Shanghai municipal government announced new measures in April to further bolster the city’s role in global finance, including initiatives to broaden CIPS coverage and explore the integration of blockchain technologies.
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