The demand for cross-border RMB payments and clearing is growing, driven by China’s investments under the Belt and Road Initiative and RMB internationalization efforts. As the use of the RMB in cross-border transactions continues to expand, this demand is expected to rise even further.
Statistics show that the Cross-Border Interbank Payment System (CIPS) processed more than 175 trillion yuan last year, marking a significant year-on-year increase of 42.60%.
According to Li Yun Seah, EY’s ASEAN Banking & Capital Markets Leader, cross-border RMB settlements are gaining rapid traction among regional enterprises. This growth is driven by China’s push for RMB internationalization and enhanced financial connectivity through the Belt and Road economic corridors.
She noted, “The digital yuan pilot program and regional platforms enabling peer-to-peer, real-time cross-border payments using central bank digital currencies have also promoted the use of the RMB in cross-border settlements.”
The digital yuan refers to the central bank digital currency issued by the People’s Bank of China since 2019, primarily used for domestic retail payments.
A research report by China Post Securities indicates that CIPS processed over 175 trillion yuan in payments last year, representing a 42.6% year-on-year increase. The system’s total transaction volume has grown consistently over the last nine years.
Local banks in Singapore are optimistic about the opportunities arising from the growing demand for cross-border RMB payments.
DBS Bank’s CIPS-related transaction volume grew by over 30% year-on-year last year
According to data provided by DBS Bank to Lianhe Zaobao, the bank’s CIPS-related transaction volume grew by over 30% year-on-year last year.
DBS China became the first Singapore-based bank to join CIPS in 2015. DBS noted that this allows the bank to provide efficient RMB payment and settlement services for corporate and financial institution clients, particularly those involved in China–ASEAN trade.
Launched by the People’s Bank of China, CIPS provides a one-stop service platform for cross-border RMB clearing, settlement, and payments to enterprises and institutions worldwide.
United Overseas Bank (UOB) noted that global RMB payments and trade settlements are growing, with over 50% of RMB fund flows directed to Southeast Asia and Greater China, which are UOB’s main markets.
In June this year, UOB announced that it had become a direct participant of CIPS, together with its wholly owned subsidiary, UOB China. This enables its clients to enjoy real-time gross settlement and remittance, reducing payment and clearing costs.
Oversea-Chinese Banking Corporation Limited (OCBC) stated that in September 2024, its subsidiary OCBC China also signed an agreement to become a direct participant in the system.
The processing time for cross-border remittances depends on the circumstances of both the sending and receiving banks
When asked whether the time required for cross-border remittances has been significantly shortened, Yuan Quan, Head of Transaction Banking for Chinese Mainland and Hong Kong at UOB, explained: “This depends on the circumstances of both the sending and receiving banks. If the receiving bank is also a direct participant in the system, the process can become nearly real-time—completing in minutes instead of the current one to two days. However, the final processing time can vary based on factors like the type of transaction.”
He also noted: “According to statistics, 95% of commercial remittances last year were processed by direct participant banks in the system. Since UOB became a direct participant, in many cases, transactions no longer require intermediary banks, which relatively reduces clients’ payment costs and clearing time.”
Bank of China Singapore told Lianhe Zaobao that traditional remittance methods require several intermediary banks to complete a transaction. These transactions are affected by intermediary processing times and time zone differences, making the process more complex. In contrast, CIPS operates across time zones of all global financial markets, while traditional remittance methods are constrained by local banking hours.
“For example,” the bank explained, “if a customer in Singapore initiates a transfer on a weekday afternoon, the payment can still be cleared in real time and reach the receiving bank even if banks in Europe are closed, offering a significant advantage in timeliness.”
As of August this year, CIPS has 176 direct participants and 1,531 indirect participants, covering Asia, Europe, Africa, North America, South America, and Oceania.
