China's Revised CIPS Rules Take Effect, Tightening Cross-Border RMB Settlement Standards

The People's Bank of China (PBOC) published revised Business Rules for the Cross-Border Interbank Payment System (CIPS) in late December 2025, with the new rules taking effect on February 1, 2026. The revision - the first comprehensive update since 2018 - reflects the system's rapid growth from a niche RMB clearing mechanism to a major cross-border payment infrastructure.

What Changed

The revised rules update several operational areas:

Participant account registration: New standards for account registration of both direct participants and operating institutions Settlement fund ownership: Clarified ownership protocols for participants' settlement funds held within the system Liquidity management: Enhanced requirements for managing liquidity among participants Settlement mechanics: Refined settlement mechanism, with single cross-border RMB payments processed via real-time gross settlement (RTGS) and batch transactions cleared through timed net settlement Queue management: Updated requirements for transaction queuing, cancellations, and returns

Why the Update Was Needed

The PBOC stated that "business increases and the number of participants expands" had made the 2018 rules insufficient. The numbers support this: CIPS now connects over 4,900 legal entity financial institutions across 180+ countries and regions, with 176 direct participants and 1,514 indirect participants as of mid-2025. Cumulative transaction volume has exceeded CNY 675 trillion (approximately USD 94 trillion).

Dual Settlement Model

The revised framework formalises a dual settlement approach: single cross-border RMB payments settle via RTGS for immediate finality, while batch transactions use timed net settlement for efficiency. This mirrors the architecture used by systems like CHAPS (RTGS) alongside BACS (net settlement) in the UK, or T2 alongside STEP2 in Europe.

What This Means

For institutions participating in CIPS - whether as direct or indirect participants - the revised rules require a compliance review of account structures, fund ownership arrangements, and liquidity practices. The update also signals CIPS's continued maturation as a SWIFT alternative for RMB-denominated cross-border flows, with the governance framework now catching up to the system's operational scale.

Sources

Xinhua News Agency - accessed 2026-03-10; China Daily - accessed 2026-03-10; People's Daily Online - accessed 2026-03-10.