China continues to expand the reach of its international payment system, adding new countries, including Kyrgyzstan, which significantly improves the speed and efficiency of international settlements.
Kyrgyzstan's Connection to CIPS
Kyrgyzstan has recently connected to the Cross-border Interbank Payment System (CIPS), which serves as an alternative to the traditional SWIFT system. According to First Deputy Prime Minister Daniyar Amangeldiev, CIPS will provide greater speed and efficiency in payment processing. He noted:
> "We have just connected to CIPS. This is the Chinese system that will enable us to make payments more quickly."
CIPS Expansion in Other Regions
China recently announced the addition of six banks to the CIPS system, which became the first direct participants from Africa, the Middle East, and Central Asia. One of the newly added banks is Standard Bank, the largest bank in Africa by assets. This expansion highlights the growing use of the yuan in international transactions and suggests the creation of more secure channels for bilateral settlements.
Future of International Payments through CIPS
The CIPS system was launched by the People's Bank of China as part of a policy to 'internationalize' the yuan. As of June 2024, CIPS has 174 direct participants and over 1,500 indirect ones. This month, the system processed 38,246 transactions worth over 754 billion yuan. Business volume metrics are expected to increase, considering the geographical expansion of the system.
Kyrgyzstan's connection to the CIPS system demonstrates China's growing influence on international financial systems and the region's countries' efforts to improve payment efficiency.
