China has updated the operating rules of its Cross-Border Interbank Payment System, formally setting a mixed settlement structure ahead of 2026. Under the revised framework, the system must process single cross-border renminbi payments using real-time gross settlement, while batch transactions must clear through timed net settlement.
As a result, payments now follow two clearly separated tracks. Individual transfers settle one by one, immediately and irrevocably, reducing settlement risk between counterparties. At the same time, high-volume batch payments move through scheduled netting cycles, allowing the system to offset obligations and improve liquidity efficiency.
In addition, the rules give the CIPS operator flexibility to adjust netting frequency, settlement windows, and processing schedules when transaction volumes or market conditions shift. This design aims to keep the system stable during peak cross-border payment periods while maintaining predictable settlement outcomes for participants.
Operational control and system evolution
The revised framework also reflects how China’s cross-border payment infrastructure has evolved since CIPS launched in 2015. Initially built to support basic offshore renminbi settlement, the system has expanded alongside the international use of the yuan in trade, investment, and financial transactions.
By locking in real-time settlement for single payments, regulators reinforce a structure similar to major global payment systems, where immediacy and finality limit systemic risk. Meanwhile, net settlement for batches mirrors long-standing international practices used to manage liquidity across large transaction flows.
Oversight remains centralized under the People’s Bank of China, which supervises system rules, risk controls, and settlement discipline. Historical data show that Chinese authorities have repeatedly adjusted payment infrastructure rules following periods of market stress, including reforms after the global financial crisis and later enhancements tied to RMB internationalization.
Taken together, the changes do not introduce a new payment rail. Instead, they clarify how existing settlement methods operate inside CIPS, formalize flexibility already used in practice, and align the system more closely with global payment standards as cross-border renminbi usage continues to grow.
