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While the international currency tension is increasing, China accelerates its offensive against dollar domination. Beijing formalizes the launch of a strategic plan to store its own international payment system. This initiative is the main turning point in the redefinition of global financial flows, which strengthens Chinese ambitions of the multipolar economic order. With a direct focus on traditional networks dominated by the West, this maneuver now attracts the attention of markets, governments and large financial institutions.
In short
- China formalizes an ambitious plan to promote its own international payment system.
- Shanghai becomes a nerve center for CIPS development, which is a direct alternative to Swift.
- The aim of Beijing is to strengthen the use of Yuan at the exchange of crosses and support its companies abroad.
- The project intends to reduce the dependence of BRIC to the US dollar and consolidate their financial autonomy.
Beijing accelerates the promotion of its international payment system
The Shanghai City Government with the support of Banque Populaire de China (PBOC) gave an official kick to an ambitious plan to increase the use of Yuan in transactions with a cross point.
This plan “The aim is to develop an independent international payment system” Based on the cross -border payment system of interbank payments (CIPS) is a network that already has more than 1,300 financial institutions distributed in 110 countries.
Chinese authorities specify their goal:
Increase Juan’s internationalization and promote the expansion of Chinese companies abroad.
CIPS presents itself as a trustworthy alternative to Swift, so far dominant in the international payment sector.
The main axes of the plan are:
- Strengthening CIPS to support direct regulations for cross introduction in Yuan;
- Optimization of multinational financial services, especially in Shanghai, in order to facilitate trade;
- Support for international Chinese companies to provide them with alternative financial and payment solutions to the US dollar;
- Reduction of dependence on the Swift network and thus reduce the exposure to external financial pressures.
Strategic choice in Shanghai for piloting this offensive is not trivial. The city plays a key role in the Chinese economy and serves as a laboratory for international financial reforms. This deployment is part of the global dynamics associated with the Belt and Road Initiative (BRI) initiative, which aims to connect the network of exchanges dominated by Yuan.
In addition to the easy strengthening of CIPS, China is now showing its intention to transform global financial architecture by offering BRIC members a real alternative to the dollar.
The project supported by PBOC determines “Promote the regulations for the crosses in Yuan” Among the Member States that mean the main strategic tendency. It is a question of facilitating exchanges in the economic block, but also a reduction in exposure to the US banking system, perceived as a lever of geopolitical influence.
Development of autonomous ecosystem payments could deeply transform the dynamics of international trade. China will support bilateral financial flows with strategic partners through CIPS and hopes to consolidate its economic influence and at the same time stimulate Yuan’s acceptance on world stock exchanges.
Such a strategy is part of the trend observed in several recent BRICS initiatives to support the use of local currencies and establish independent financial institutions.
This development asks several questions about the future of the international monetary system. If the transition to the multipolar world in the area of payments should accelerate, this could weaken the dollar’s superiority and generate deep composition on the financial markets. Finally, the boom in the payment system for autonomous BRIC could offer developing countries increased capacity of economic maneuver, which would also lead to tension with the defenders of the current monetary rules.
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A graduate of the Toulouse and the Blockchain Consultant Certification certification holder and I joined the adventure of Cointribuna in 2019. I convinced of the potential of blockchain to transform many economy sectors, committing to raising awareness and informing the general public about how the ecosysty developed. My goal is to allow everyone to better understand blockchain and take the opportunity they offer. I try to provide an objective analysis of messages every day, decrypt trends on the market, hand over the latest technological innovations and introduce the economic and social issues of this revolution.
Renunciation
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