CIPS is a settlement system for transactions in yuan, created back in 2015, the main function of which is the exchange of messages between banks, including transactional transfers.
In the context of sanctions pressure and the reorientation of Russian business to the Chinese market, this is a good alternative to solving problems with financial flows, due to the blocking of the international interbank system SWIFT.
In 2023, more than 30 Russian banks have already joined CIPS (the national Chinese bank transfer system), but mainly as indirect participants. Connection, as direct participants, is possible, in accordance with Chinese law, only for residents of the Middle Kingdom itself.
According to statements by senior representatives of the banking sector of the Russian Federation, the primary task for Russian banks is precisely to connect to the system as a direct participant, excluding any mediation.
The share of cross-border settlements between Russia and China in 2023 amounted to about 70%, which indicates the urgent need to resolve issues on transactional transfers within the framework of the current CIPS system. It is not yet known how technically possible the integration of the Financial Message Transmission System (SPFS) created by the Central Bank with the Chinese CIPS is today.
The average daily volume of all transactions in the CIPS system has already reached about 60 billion US dollars. The total number of participants is 1,437, of which 80 are direct and 1,357 are indirect. The composition of the participants is mainly the countries of mainland China, as well as a small number of countries in Europe, Africa, Oceania, as well as North and South America.
According to SWIFT, in 2023, the dollar's share in world trade increased from 39.38% to 46.46%, while the yuan's share increased from only 2.19% to 3.06%.
However, it is necessary to take into account the fact that in China's trade with Russia, North Korea, Iran, the Arabs, India, Brazil, etc., SWIFT does not take into account transactions through CIPS, which may cause a certain error regarding the objectivity of the data provided.
