Big News for the Renminbi! It's Becoming Increasingly “User-Friendly” as CIPS's Role Grows More Prominent!

    Major RMB Update.

    Recently, the head of the Payment and Settlement Department of the People's Bank of China stated that through concerted efforts, a diversified payment service system featuring parallel development and mutual complementarity among payment methods such as bank cards, mobile payments, and cash has taken initial shape, significantly enhancing payment convenience for foreign nationals in China. Moving forward, the People's Bank of China will continue to refine the cross-border RMB payment system, deepen opening-up and cooperation in cross-border payments, ensure the stable operation of payment infrastructure, maintain strict oversight of the payment industry, and consistently optimize payment services. These efforts aim to better serve the development of a financial powerhouse and contribute to achieving modernization with Chinese characteristics.

    Notably, the Cross-border Interbank Payment System (CIPS) has increasingly demonstrated its significance. By the end of September 2025, CIPS had connected over 1,700 domestic and international participants, with its services reaching more than 5,000 legal entity banks across 189 countries and regions on six continents. In 2024, CIPS processed cross-border RMB transactions totaling 175 trillion yuan, marking a 43% year-on-year increase and an average annual growth rate of 40.3% since the start of the 14th Five-Year Plan period.

    Currently, the renminbi has become China's primary settlement currency for external payments, the world's second-largest trade financing currency, and the third-largest payment currency. It holds the third-largest weight in the International Monetary Fund's Special Drawing Rights (SDR) currency basket.

    Continuing to Improve the Cross-Border RMB Payment System

    According to a report by the Financial Times on October 19, a representative from the Payment and Settlement Department of the People's Bank of China stated in an interview that Governor Pan Gongsheng emphasized at the 2025 Lujiazui Forum that the cross-border payment system serves as the “artery” for global monetary fund flows, acting as a crucial foundation for promoting international trade and investment financing while maintaining financial stability. The People's Bank of China has continuously advanced the development of the cross-border RMB payment system, establishing a multi-channel, extensive, secure, and efficient cross-border RMB payment and clearing network.

    On one hand, the construction and refinement of cross-border payment infrastructure have expanded network coverage. First, the primary role of CIPS (Cross-border Interbank Payment System) in cross-border RMB transactions has become increasingly prominent. By the end of September 2025, over 1,700 domestic and international participants had been connected to the system, with business reaching more than 5,000 legal entity banks across 189 countries and regions on six continents. In 2024, CIPS processed cross-border RMB transactions totaling 175 trillion yuan, a year-on-year increase of 43%, with an average annual growth rate of 40.3% since the start of the 14th Five-Year Plan period. Second, the coverage of the China UnionPay network continues to expand. UnionPay cards have become one of the three major international bank card brands, with over 2,600 domestic and international member institutions and an acceptance network extending to 183 countries and regions worldwide. Third, the digital renminbi platform has launched the multilateral central bank digital currency bridge (mBridge) with the Hong Kong Monetary Authority, the Bank of Thailand, and the Central Bank of the United Arab Emirates.

    On the other hand, efforts to advance cross-border payment connectivity continue, facilitating the flow of cross-border capital and personnel. First, the cross-border interconnection of the FAST system was achieved for the first time, enhancing the efficiency of cross-border remittances. Responding to the trend of integration between the mainland and Hong Kong, the People's Bank of China and the Hong Kong Monetary Authority successfully connected the mainland and Hong Kong FAST systems in June 2025 (Cross-Border FAST). This enables residents and enterprises in both regions to conduct cross-border remittances online in real time, effectively improving efficiency and reducing costs, and has been widely welcomed by all sectors of society. Second, the cross-border interconnection of QR code payments has been promoted, enhancing the cross-border interoperability of retail payments. The People's Bank of China, in collaboration with the China Payment and Clearing Association and China UnionPay, established a unified cross-border QR code gateway. It encouraged clearing institutions and payment providers to leverage their mobile payment strengths and engage in extensive international cooperation. Clearing institutions partnered with overseas QR code networks, achieving interoperability with nine countries including Malaysia. Payment providers collaborated with foreign commercial entities, enabling Chinese residents to make QR code payments in over 70 countries and regions while introducing multiple overseas wallets for use within China.

    Through concerted efforts, a diversified payment service system featuring parallel development and mutual complementarity among bank cards, mobile payments, and cash has taken initial shape, significantly enhancing payment convenience for foreign visitors to China. Foreign visitors' awareness and acceptance of China's mobile payment systems continue to grow, with “scan-to-pay” becoming their primary payment method. Statistics show that in the first half of 2025, active mobile payment users among inbound travelers exceeded 10 million, with transaction volume and value increasing by 162% and 149% year-on-year, respectively.

    Moving forward, the People's Bank of China will continue to refine the cross-border RMB payment system, deepen opening-up and cooperation in cross-border payments, ensure the stable operation of payment infrastructure, maintain strict oversight of the payment industry, and consistently optimize payment services. These efforts will better serve the development of a financial powerhouse and contribute to achieving modernization with Chinese characteristics.

    PBOC Extends Bilateral Currency Swap Agreements with Multiple Countries

    At the bilateral level, the People's Bank of China has renewed bilateral currency swap agreements with multiple central banks in recent months.

    On October 15, during the IMF/World Bank Annual Meetings, PBOC Governor Pan Gongsheng renewed the bilateral currency swap agreement with Icelandic Central Bank Governor Katrín Jónsdóttir. This aims to strengthen bilateral financial cooperation, facilitate economic and trade exchanges between the two countries, and jointly maintain financial stability. The China-Iceland bilateral currency swap agreement has a swap size of RMB 3.5 billion/ISK 70 billion and is valid for five years.

    Pan Gongsheng stated that China and Iceland have maintained long-standing friendly cooperative relations and hope to deepen bilateral financial cooperation by taking the renewal of the bilateral currency swap as an opportunity.

    On September 7-8, during the Bank for International Settlements' Governors' Meeting, Pan Gongsheng signed bilateral currency swap agreements with European Central Bank President Christine Lagarde, Swiss National Bank Governor Thomas S. Kager, and Hungarian National Bank Governor László Varga. Discussions also covered international economic and financial developments as well as bilateral financial cooperation.

    The China-EU bilateral currency swap has a scale of RMB 350 billion/EUR 45 billion, with a three-year validity period. The China-Switzerland bilateral swap has a scale of RMB 150 billion/CHF 17 billion, valid for five years. The China-Hungary bilateral swap has a scale of RMB 40 billion/HUF 1.9 trillion, also valid for five years.

    On August 28, with the approval of the State Council, the People's Bank of China and the Reserve Bank of New Zealand recently renewed their bilateral currency swap agreement. The swap size is RMB 25 billion, with a five-year validity period that can be extended upon mutual agreement.

    Additionally, on September 11, the People's Bank of China and Bank Indonesia jointly launched a bilateral Local Currency Trade Settlement (LCT) framework and QR code interoperability cooperation project. The governors of both central banks announced the official launch of the LCT framework. In May 2025, witnessed by Premier Li Qiang and Indonesian President Prabowo Subianto, the two central banks signed a memorandum of cooperation. This upgraded the 2020 framework for promoting local currency settlement in current account transactions and direct investment to an LCT framework, expanding the scope of local currency settlement to all balance of payments items. This aims to further facilitate the use of local currencies in bilateral trade and investment.

    It is understood that bilateral currency swap agreements between central banks constitute a financing arrangement whereby one central bank can exchange its currency for another's to obtain liquidity in the latter's currency. Typically used to maintain financial market stability, such swaps are reversed upon maturity. Signing bilateral currency swap agreements between central banks is an established international practice.

The Renminbi's International Status Steadily Enhances

    Recently, a spokesperson from the Macroprudential Supervision Bureau of the People's Bank of China noted in an interview that the renminbi has become China's primary settlement currency for external payments, the world's second-largest trade financing currency, and the third-largest payment currency. It also holds the third-largest weight in the International Monetary Fund's Special Drawing Rights (SDR) currency basket.

    First, cross-border renminbi trade, investment, and financing have grown substantially, significantly enhancing its effectiveness in serving the real economy. In the first half of 2025, the total value of cross-border RMB receipts and payments reached 35 trillion yuan, a year-on-year increase of 14%. Among these, cross-border RMB receipts and payments for goods trade totaled 6.4 trillion yuan, accounting for 28% of the total cross-border receipts and payments in both domestic and foreign currencies during the same period. Both the transaction volume and share reached their highest levels on record. Against the backdrop of increased exchange rate flexibility, more enterprises are willing to use the RMB for cross-border settlements to hedge against exchange rate risks and reduce financial costs.

    Second, China's financial markets have steadily opened up, with the offshore RMB market developing healthily and the global appeal of RMB assets markedly increasing. Currently, overseas entities hold over 10 trillion yuan in onshore RMB financial assets. Central banks or monetary authorities in more than 80 countries and regions have included the RMB in their foreign exchange reserves, while RMB bonds and stocks have been incorporated into major global asset trading indices. RMB deposits in major offshore markets reached 1.6 trillion yuan. The outstanding balance of offshore RMB bonds and panda bonds issued by overseas institutions amounts to approximately 2 trillion yuan.

    Third, the global payment and clearing network for the renminbi has gradually improved, making the renminbi increasingly “user-friendly.” The Cross-border Interbank Payment System (CIPS) has connected 1,729 participants, covering over 5,000 legal entity banks across 189 countries and regions on six continents. Cross-border digital renminbi transactions, as well as the interconnectivity of domestic and international rapid payment systems and QR codes, are advancing steadily, continuously enhancing the efficiency of cross-border payments.

    Fourth, international monetary and financial cooperation has been comprehensively deepened, with the renminbi playing a significant role in the global financial stability system. At the global level, the renminbi has been included in the Special Drawing Rights (SDR) currency basket, with a weight of 12.28%, ranking behind the US dollar and the euro. At the bilateral level, the People's Bank of China has signed bilateral currency swap agreements with the central banks or monetary authorities of 32 countries or regions.