Chinese banks are urged to increase its use of the country’s own financial messaging network for cross-border transactions in the mainland, Hong Kong and Macau, reports Reuters.
Greater use of the Cross-Border Interbank Payment System (CIPS) instead of the SWIFT system would cut exposure of China’s global payments data to the United States, the Bank of China International (BOCI) said in a report co-authored by a former foreign exchange regulator.
Launched in 2015 to help internationalise the yuan, CIPS said it processed $19.4b (CNY135.7b) a day in 2019, with participation from 96 countries and regions.
If the US were to cut off some Chinese banks’ access to dollar settlements, China should also consider stopping using the US dollar as the anchor currency for its foreign exchange controls.
China should also develop legislation similar to the European Union’s Blocking Statute, which allowed the EU to sustain trade and economic relations with Iran, the report added.