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Clearing The Way To Renminbi Domination: Cips, Antitrust, And Currency Competition, Felix B. Chang

Faculty Articles and Other Publications

China watchers have decried the emergence of the Cross-Border Interbank Payment System (“CIPS”) as a turning point in the move to dethrone the U.S. dollar. This Article situates CIPS, which clears and settles Chinese renminbi transactions, with other financial market infrastructures, drawing lessons from how those entities have thrived or failed.

In recent conversations, CIPS has been conflated with other infrastructures (e.g., the SWIFT payment messaging system) and currency trends (e.g., de-dollarization and sanctions evasion). However, a currency clearinghouse is very different than most financial institutions. For CIPS, the market-maker in the adjacent trading market is the Chinese government, a …