Clearing House Interbank Payments System
CHIPSACTIVEOperator: The Clearing House (TCH)
Overseer: Board of Governors of the Federal Reserve System, New York State Department of Financial Services
Legal basis: Designated as a systemically important Financial Market Utility (FMU) under Dodd-Frank Title VIII
Launched: Jan 1, 1970
Quick reference: View technical card →
Executive Summary
CHIPS is a large-value USD payment system operated by The Clearing House, which reports more than $2 trillion in average daily value cleared and settled and more than 630,000 transactions processed each business day. The system averaged $2.245 trillion and 660,894 transactions a day over the 2026 year to date through August. It serves as the primary clearing system for international US dollar payments and cross-border transactions. Unlike Fedwire's pure RTGS model, CHIPS uses a hybrid approach: continuous bilateral and multilateral netting through the day, with final settlement via Fedwire. The Clearing House reported a liquidity efficiency ratio of approximately 26:1 for 2025, so netting reduces the amount participants must fund to a small fraction of gross value. CHIPS has 43 direct participant banks.
How It Works
Settlement Model
Hybrid: continuous netting with final settlement in central bank money via Fedwire
Message Standard
ISO 20022 (migrated April 8, 2024; first full calendar year under new standard in 2025)
Max Transaction
No limit
Clearing Mechanism
Continuous bilateral and multilateral netting algorithm — the core innovation of CHIPS. Netting reduces ~$2.0T gross to ~$96B net settlement, a 26:1 liquidity efficiency ratio.
Settlement Cycle
Operating hours: 09:00–18:00 ET, Mon-Fri. Continuous bilateral and multilateral netting throughout the day. Final settlement via Fedwire at end of day. Prefunding required at start of day. CHIPS rules last updated April 21, 2025.
Message Flow
The sending participant submits a payment message to CHIPS. CHIPS holds the message in queue and continuously attempts bilateral and multilateral netting against other pending messages. When a netting opportunity is found, offsetting payments are released simultaneously with zero funding requirement. Remaining payments are released against prefunded positions or additional funding. At day's end, residual net positions are settled via Fedwire.
Typical Use Cases
Cross-border USD payments, FX settlement, correspondent banking, international trade finance, syndicated loan payments, eurodollar transactions
Key Data
Daily Volume
660,894 transactions (2026 YTD avg through August)
As of Aug 31, 2026 · The Clearing House
Yearly Growth
9% value growth, 12% volume growth (2025 vs 2024)
As of Dec 31, 2025 · The Clearing House
Participants & Access
Membership Requirements
Limited to commercial banking organisations with a significant volume of USD payments. Must meet capital, operational, and risk management requirements. Currently ~43 direct participants, all major global banks.
Governance & Risk
Governance Model
Owned and operated by The Clearing House. Governed by CHIPS Rules and Administrative Procedures. Subject to Federal Reserve and NYDFS oversight. Participant risk committee oversees credit and operational risk.
Concentration Risk
Very high — CHIPS processes the majority of international USD payments. Participant base is concentrated among large global banks. Designated as systemically important FMU. Disruption would affect global USD liquidity.
Resilience & Business Continuity
TCH operates redundant processing sites. Prefunding and closing position requirements limit settlement risk. End-of-day settlement via Fedwire provides central bank money finality. Regular contingency testing.
Dispute Resolution
CHIPS Rules govern inter-participant disputes. Once a payment is released through netting, it is final and irrevocable.
Pricing
CHIPS pricing is based on transaction volume and messaging fees. Specific fee schedules are shared with participants.
Source: The Clearing House
Connectivity
settles via
Fedwire
CHIPS daily net positions are settled via Fedwire in central bank money
Peer Comparison
CHIPS is unique among major payment systems due to its netting model — neither T2 nor CHAPS use netting (both are pure RTGS). CHIPS processes more cross-border USD transactions than Fedwire. The netting efficiency (~95% reduction) is CHIPS's key advantage, significantly reducing liquidity requirements for participants.
Compare in detail →Regulatory Framework
unsourced dateApr 1, 2025
CHIPS ISO 20022 migration complete
CHIPS completes migration to ISO 20022 message format, aligning with Fedwire’s March 2025 migration.
Timeline
Stored date Aug 31, 2026; precision not reviewed
CHIPS average daily transactions increased to 660,894 (2026 YTD through August)
CHIPS average daily transactions changed from 632,419 (2025 avg) to 660,894 (2026 YTD through August). Recorded by ClearingPost on 2026-09-26.
SourceStored date Aug 31, 2026; precision not reviewed
CHIPS average daily value increased to $2.245T (2026 YTD through August)
CHIPS average daily value changed from $2.014T (2025 avg) to $2.245T (2026 YTD through August). Recorded by ClearingPost on 2026-09-26.
SourceStored date Aug 31, 2026; precision not reviewed
CHIPS subsystem record increased to 660,894 transactions (2026 YTD avg through August)
CHIPS subsystem record changed from 632,419 transactions (2025 avg) (as of 2025-12-31) to 660,894 transactions (2026 YTD avg through August) (as of 2026-08-31). Recorded by ClearingPost on 2026-09-26.
SourceStored date Aug 31, 2026; precision not reviewed
CHIPS subsystem record increased to $2.245 trillion (2026 YTD avg through August)
CHIPS subsystem record changed from $2.014 trillion (2025 avg) (as of 2025-12-31) to $2.245 trillion (2026 YTD avg through August) (as of 2026-08-31). Recorded by ClearingPost on 2026-09-26.
SourceStored date Aug 31, 2026; precision not reviewed
CHIPS subsystem record updated
CHIPS subsystem record changed from CHIPS is a large-value USD payment system operated by The Clearing House, processing approximately $1.8 trillion daily.
SourceStored date Dec 31, 2025; precision not reviewed
CHIPS subsystem record updated
CHIPS subsystem record changed from Continuous bilateral and multilateral netting algorithm — the core innovation of CHIPS. Netting reduces ~$1.8T gross to ~$90B net settlement.
SourceStored date Dec 31, 2025; precision not reviewed
CHIPS subsystem record recorded
CHIPS subsystem record recorded as 9% value growth, 12% volume growth (2025 vs 2024) (as of 2025-12-31). First structured value captured by ClearingPost on 2026-08-07.
SourceStored date Dec 31, 2025; precision not reviewed
CHIPS headline volume increased to $2.014T
CHIPS headline volume changed from $1.9T to $2.014T. Recorded by ClearingPost on 2026-09-17.
SourceIntelligence (10)
NewsSep 30, 2026Headline names “CHIPS”
The Clearing House Selects Quant for Tokenized Deposit Network Linked to RTP and CHIPS
The operator of RTP and CHIPS picked Quant for its tokenized deposit network and expects it to be available to participating institutions in the first half of 2027. The 24 September release names no participating bank and does not identify the ledger.
Operator source · The Clearing House
NewsJun 12, 2026Summary names “CHIPS”
17 US Banks Commit to Clearing House Tokenized Deposit Settlement Network
TCH's blockchain-based deposit tokenization platform, backed by JPMorgan, Citigroup, Bank of America, and 14 other financial institutions, will connect on-chain settlements to existing CHIPS and RTP rails. The target launch is the first half of 2027.
External source · Ledger Insights
NewsJun 8, 2026Headline names “CHIPS”
The Clearing House to Operate Tokenized Deposit Network With Bridge to CHIPS and RTP
A consortium of seventeen US banks will build a shared tokenized deposit platform operated by The Clearing House, connecting on-chain settlement of commercial bank money to the existing CHIPS and RTP payment infrastructure.
External source · PRNewswire (The Clearing House)
AnalysisJun 5, 2026Headline names “CHIPS”
CHIPS Crosses $2 Trillion in Daily Value as Huntington Joins Network
Huntington National Bank became CHIPS's 43rd direct participant on May 19, 2026, following its merger with Cadence Bank. The network's continuous matching engine now settles payments for 43 clearing members, reducing required prefunding to roughly $96 billion against more than $2 trillion in gross throughput.
Operator source · The Clearing House
NewsMay 23, 2026Headline names “CHIPS”
Huntington National Bank Joins CHIPS as 43rd Direct Participant
CHIPS processed an average $2.014 trillion in daily value across 632,419 transactions in 2025. Daily net positions settle through Fedwire in central bank money.
External source · FFNews
AnalysisMay 15, 2026Headline names “CHIPS”
Fedwire and CHIPS Both Start Q1 2026 Above 2025 Baselines
First-quarter 2026 data from the Federal Reserve and The Clearing House shows both Fedwire and CHIPS running above their 2025 daily averages, with CHIPS posting stronger relative gains in settled value.
External source · Federal Reserve Financial Services
AnalysisApr 27, 2026Headline names “CHIPS”
Fedwire and CHIPS Settle Combined $6.9 Trillion Daily in Q1 2026
Q1 2026 data from the Federal Reserve and The Clearing House show both US large-value payment systems running above their 2025 full-year averages. CHIPS volume growth has outpaced Fedwire for the second consecutive year.
External source · Federal Reserve Financial Services
NewsApr 9, 2026Headline names “CHIPS”
CHIPS Averages $2 Trillion Daily Value in 2025 With 12 Percent Volume Growth
The system's multilateral netting algorithm generated $15.4 million in daily liquidity savings during the year. That was up from $14.3 million in 2024. Annualized savings totaled approximately $5.6 billion across 42 direct participants.
External source · PYMNTS
AnalysisMar 26, 2026Summary names “CHIPS”
Fedwire's 22x6 Expansion: Near-Continuous USD Settlement Targeted for 2028-2029
The Federal Reserve's decision to extend Fedwire Funds Service to 22 hours per day, six days per week positions the United States to close structural gaps in global USD settlement availability, with direct implications for CHIPS netting cycles and cross-border payment flows across Asian and European time zones.
External source · Federal Reserve Board
NewsNov 28, 2025Headline names “CHIPS”
CHIPS Sets All-Time Volume Record: 1.21 Million Payments, $2.97 Trillion in Single Day
November 2025's daily average hit 693,000 payments, the highest monthly average on record.
Operator source · The Clearing House
Wider coverage that mentions CHIPS (3)
These articles mention CHIPS in their text but not in their headline or summary, so they are listed as context rather than as CHIPS intelligence.
Apr 1, 2026Text mentions “CHIPS”
Fedwire Joins Global Push for Near-Continuous RTGS Settlement
External source · Federal Register
Mar 23, 2026Text mentions “CHIPS”
SWIFT Structured Address Mandate Looms as Industry Surveys Reveal a Third of Payment Providers Unprepared
External source · SWIFT
Mar 11, 2026Text mentions “CHIPS”
DNS, RTGS, and Hybrid Settlement: How Payment Systems Actually Clear and Settle
External source · BIS CPMI
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