Reuters | Staff | Feb 4, 2021
SHANGHAI, Feb 4 (Reuters) – SWIFT, the global system for financial messaging and cross-border payments, has set up a joint venture with the Chinese central bank’s digital currency research institute and clearing centre, in a sign that China is exploring global use of its planned digital yuan.
Other shareholders of the Beijing-based venture include China’s Cross-border Interbank Payment System (CIPS) and the Payment & Clearing Association of China, both supervised by the People’s Bank of China (PBOC), according to public information.
The new entity, called Finance Gateway Information Services Co, was established in Beijing on Jan. 16, and its business scope includes information system integration, data processing and technological consultancy, according to the website of the National Enterprise Credit Information Public System.
China is a front-runner in the global race to launch central bank digital currencies, having launched domestic trials in several major cities including Shenzhen, Chengdu and Hangzhou.
Its digital currency will help increase oversight of money flows, while also raising the efficiency of cross-border payments and facilitate yuan internationalization, HSBC said in a recent report. China’s cross-border payment system CIPS both partners and competes with SWIFT amid growing Sino-U.S. tensions.