SWIFT accelerating its localization in China
August 13, 2019 Category China News Round-up, Weekly
The Society for Worldwide Interbank Financial Telecommunication (SWIFT), the global financial messaging service platform, is accelerating its localization as the Chinese financial market increasingly liberalizes. “We have incorporated a new wholly-owned foreign entity in Beijing, which means we will be able to localize our products and services to the China market soon,” Michael Moon, SWIFT’s Managing Director of Payments, Trade and Communications for APAC, told China Daily in an exclusive interview. With this new entity, SWIFT will provide products and services, as well as the contracts behind SWIFT services, in the Chinese language. It will also invoice in renminbi as an option on top of the euro or U.S. dollar.
“We see growth in use of the RMB (yuan) on the SWIFT network, and businesses are growing. More and more financial institutions are transacting in RMB, and China is among the top five economies globally in terms of contribution to the SWIFT business,” Moon said. “By the end of April 2019, around 2,543 financial institutions made worldwide payments in RMB. Among them, over 872 banks use the Chinese currency for payments without involving the Chinese mainland or Hong Kong.” The SWIFT RMB Tracker showed that in June 2019, the RMB retained its position as the fifth most active currency for international payments by value, with a share of 1.99%. Overall, RMB payments value declined 1.83% compared to May 2019. In general, all payments currencies decreased by 3.55%. In terms of international payments, excluding payments within the euro-zone, the RMB ranks 8th with a share of 1.28% in June 2019.
“We have over 500 customers in China, including banks, financial institutions, market infrastructures and corporates, and we have a representative from the Bank of China serving as a SWIFT board member,” Moon said. “There are a number of initiatives occurring to further facilitate RMB global usage, such as the Cross-border Interbank Payments System (CIPS) with whom we are working to promote wider usage of RMB in global cross-border businesses,” he said. CIPS was launched in 2015 by the People’s Bank of China (PBOC) to facilitate RMB clearing and settlement for financial institutions in China and companies conducting cross-border and offshore business. There were over 872 banks connected to CIPS globally by the end of April. SWIFT and CIPS signed a letter of intent in January 2019 to enhance cooperation in supporting the RMB’s cross-border payment services, the China Daily reports.
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