CHINA is quietly growing its homegrown payments system to allow cross-border transactions in yuan as trade and investment with the rest of the world grows and the country makes a bigger push to globalize its currency. Cross-Border Interbank Payment System, run by CIPS Co. and launched by China’s central bank in 2015 to settle international claims in yuan, will increase the number of direct participating banks using the system to nearly 80 by the end of this year from the current 71, said Xu Zaiyue, chief executive officer of CIPS. “The expansion will make it more convenient for global clients to use CIPS services,” said Xu. “We hope to provide services all around the globe one day, and especially to facilitate services to overseas participants.” Based in Shanghai and employing over 100 people, CIPS counts three dozen domestic and foreign banks like HSBC Holdings Plc and Standard Chartered Plc. as its shareholders, as well as financial market infrastructure operators. The payments system was created to boost the global use of the yuan, which remains small compared with the size of China’s economy. The share of yuan payments via SWIFT — the Society for Worldwide Interbank Financial Telecommunication, which dominates the international payments system — stood at 2.2 percent in July. CIPS is also seen as a possible alternative to the U.S.-dominated global settlement system comprising of SWIFT and Clearing House Interbank Payments System. Trade and political tensions between the world’s two biggest economies have threatened to spill over into the financial sector, which some have warned could mean China is cut off from networks like SWIFT. CIPS is currently laying the technical groundwork to prepare for the internationalization of the yuan, which will happen as a natural result of China’s economic development and opening-up, Xu said. The company has adopted ISO20022, the emerging global and open standard for payments messaging, he said. (SD-Agencies) | 