HSBC’s Hong Kong division has become a direct offshore participant in China’s global interbank renminbi payment system, CIPS, as confirmed in a company statement. This move supports Beijing’s efforts to promote the yuan internationally, aiming to increase its role in global finance and challenge the U.S. dollar’s dominance.
The yuan currently ranks as the fourth most-used currency globally, according to SWIFT data, but still lags behind other major currencies. “The renminbi’s global usage doesn’t align with China’s economic size,” said HSBC Asia Pacific Co-CEO David Liao at a recent banking event, following the announcement of HSBC’s CIPS access.
Standard Chartered’s Hong Kong branch was the first major offshore unit of a global bank to join CIPS directly in 2022. Established in 2015, CIPS streamlines renminbi transactions, replacing previous systems and facilitating cross-border payments in yuan.
CIPS has grown in adoption since its inception, with 153 members as of September. The system has seen a marked increase in usage by Russian financial institutions after SWIFT access was restricted for Russian banks following Moscow’s 2022 invasion of Ukraine.
Both HSBC’s and Standard Chartered’s mainland China operations are already integrated into CIPS, and Hong Kong, as of July, remains the largest offshore renminbi clearing hub, handling approximately 83% of global yuan transactions, SWIFT data shows.
