CIPS is a system designed to handle cross-border payments using the Chinese Yuan (RMB). As opposed to most of the other systems that wait for the end of the day to settle their transactions, CIPS payment settlement is in real time, meaning they are cleared immediately. Instant settlement reduces the chances of problems that may crop up with delayed payments.

It is operated by CIPS Co., Ltd., a subsidiary of the People’s Bank of China, China’s central bank. With China seeking to make the RMB a more global player, CIPS forms part of such a process. It is also an alternative to the current system dominated by the US dollar.

CIPS vs SWIFT: What’s the Difference?

You might think that CIPS and SWIFT-the global messaging system that powers international payments-are in direct competition, but they actually serve different roles:

While SWIFT functions as a global messaging system, transmitting instructions for payments  between banks, CIPS handles the actual settlement of RMB transactions. In other words, SWIFT is like a postal service, telling banks what to do, while CIPS is like a clearinghouse that executes the transaction.

Key Features and Growth of CIPS

CIPS was designed with speed, reach, and efficiency in mind-especially important for China’s goal of getting the RMB into more international transactions. Since its launch, it has grown very fast, with more than 4,900 banks in 187 countries using the system as of mid-2025. It operates 24/5 plus 4 extra hours to make sure that any hour in a different time zone falls under its operational time.

Since its launch, CIPS has expanded rapidly. As of mid-2025, CIPS services reach over 4,900 banking institutions across 187 countries and regions. It operates on an extended schedule of 24/5 plus an additional 4 hours, ensuring compatibility with global financial markets in various time zones.

CIPS has two primary types of participants:

1. Direct Participants: Large banks, including major foreign banks, that open accounts with CIPS and can send and receive payments directly.
2. Indirect Participants: Smaller banks that access the system via direct participants, allowing them to leverage CIPS services without needing their own direct connection.

Integration with SWIFT

Although CIPS is a key player in China’s long-term financial strategy, it still relies heavily on SWIFT’s messaging network for a significant portion of its transactions. This is especially true for non-Chinese banks that have not fully adopted CIPS’s proprietary messaging standards. In fact, it is estimated that approximately 80% of CIPS transactions are facilitated through SWIFT messages.

Despite the geopolitical tensions, CIPS and SWIFT cooperate on several initiatives, including the adoption of the ISO 20022 messaging standard, which enables richer, more detailed data transfer. This ensures that CIPS remains globally compatible while it gradually develops its own infrastructure and messaging protocols.

Geopolitical Implications and the Future of the RMB

The rise of CIPS is not just a technical development—it is part of China’s broader geopolitical strategy to reduce dependence on the US-led financial system and facilitate the global adoption of the RMB. There are several key drivers behind this effort:

1. Sanctions Buffer: Countries facing the threat of US sanctions, such as Russia, are increasingly looking for alternatives to SWIFT. CIPS provides a viable channel for cross-border payments in RMB, offering a non-USD route for trade and financial transactions.
2. Belt and Road Initiative (BRI): As the primary settlement mechanism for trade and financing under China’s Belt and Road Initiative, CIPS plays a vital role in embedding the RMB in the economies of participating countries. This further strengthens China’s financial influence in the Global South.
3. Digital Yuan (e-CNY): In addition to traditional cross-border payments, CIPS is also exploring the integration of China’s Digital Yuan (e-CNY) for international transactions. Pilot projects, such as the mBridge initiative, could allow for faster, cheaper, and more efficient payments, potentially bypassing traditional banking systems altogether.

The Long-Term Vision: A Parallel Financial System

CIPS is still in its development stage and does not aim to replace SWIFT entirely. But over the longer term, China envisions a system in which the RMB has a greater role, perhaps even diminishing reliance on the US dollar across the globe. This would include the expansion of CIPS but also the development of messaging standards unique to China and promoting the Digital Yuan.

Giving China an infrastructure to support both trade and finance in RMB makes the currency more attractive for international transactions. The more countries and businesses that get on board, the more CIPS has the potential to be a serious alternative to the US dollar-dominated system-particularly for nations looking for alternatives to being cut off from US financial networks.

China’s CIPS is part of  strategy to shape the future of global finance. Promoting the RMB in international trade, creating an alternative to the US-dollar system, and even laying the foundation for a new, China-centered financial infrastructure are some of the ways CIPS can change the face of finance over the next several decades. Even while it continues to use SWIFT for the majority of its transactions, CIPS is building toward its larger goal of establishing the RMB as a global currency and a freestanding financial system independent of traditional Western systems.