China adds new partners to its ¥175 trillion CIPS system in Central Asia

China is expanding the geographical coverage of its yuan-based international payment system, adding banks in Central Asia and other regions. The growing reach is likely to boost its annual business volume beyond the 175 trillion yuan (over $24 trillion) already registered last year.

Following the latest wave of expansion, the central bank in Beijing is now offering clearing and settlement services in cross-border payments and trade using its fiat currency to financial institutions in almost 190 countries around the world.

Central Asia’s Kyrgyzstan joins Chinese SWIFT alternative

The Central Asian nation of Kyrgyzstan has recently connected to China’s Cross-border Interbank Payment System (CIPS), seen as an alternative to the well-established global system for international payments known as SWIFT (Society for Worldwide Interbank Financial Telecommunication).

In an interview with the TASS news agency on Monday, the First Deputy Prime Minister of the former Soviet Republic, Daniyar Amangeldiev, noted his country is taking into account new trends and highlighted that CIPS is offering faster payments.

Speaking after his participation in the St. Petersburg International Economic Forum (SPIEF), which gathered politicians and business leaders from almost 140 countries in Russia’s second largest city last week, the Kyrgyz official elaborated:

“We have just recently connected to the CIPS. This is the Chinese system that will enable us to make payments in a more expedited way.”

At the beginning of June, Kyrgyzstan’s finance minister and central bank governor met with Chinese Minister of Finance Lan Foan in Beijing. The two sides discussed cross-border payments and the linking of Bishkek’s state-owned banks to China’s infrastructure in the field.

“This step will create a secure and stable channel for bilateral settlements in yuan, reduce transaction costs, and decrease dependence on settlements through third currencies,” the Kyrgyz finance ministry insisted in a statement at the time.

China pushes CIPS expansion in Africa and the Middle East

Kyrgyzstan revealed it is joining the CIPS after earlier this month, the People’s Republic announced it had added another six banks to its cross-border payment system, noting these are the first direct participants from Africa, the Middle East, and Central Asia.

Among the newly connected financial institutions is Standard Bank, Africa’s biggest lender in terms of assets. The news came out during this year’s edition of China International Finance Exhibition which gathered over 300 financial institutions in Shanghai, including around 40 foreign firms.

According to local media, the event highlighted the financial hub’s role in spreading the use of the renminbi (RMB), as the Chinese yuan (CNY) is also called. Beijing remains committed to the global expansion of its digital version as well, the digital yuan (e-CNY), as recently indicated by the head of China’s monetary authority.

“It will be quicker, and it will be less expensive,” commented Anne Aliker, head of corporate and investment banking client coverage at Standard Bank Group, who attended the expo held as part of the Lujiazui Forum. The latter was devoted to fostering international financial cooperation.

Connecting to CIPS shortens cross-border remittance time from 3 to 5 days to around 2 hours, noted Li Zijian, chief representative of Uzbekistan’s Octobank in China, quoted by ShanghaiEye. Kyrgyzstan’s neighbor is another Central Asian nation where Beijing has been increasing its presence.

The People’s Bank of China launched its cross-border payments system within a policy aimed at “internationalizing” the use of the yuan. According to its website, the CIPS currently has 174 direct participants and over 1,500 indirect participants.

More than 4,900 banking institutions in 187 countries are already using its services. This month alone, the system has processed 38,246 transactions for more than 754 billion yuan ($105 billion), as of June 23. Its total annual business volume in 2024 reached ¥175 trillion (almost $24.4 trillion).

Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More