Overview of Rule Upgrades
Recently, the People's Bank of China announced the new version of the "Rules for the Cross-Border Payment System of Renminbi" (Yin Fa [2025] No. 248), which will take effect on February 1, 2026. This new regulation will completely replace the previous 2018 version, marking a new phase in the foundational system of cross-border payment in Renminbi. Compared to the 2018 version, the new rules emphasize two main lines in system design: first, a higher intensity of centralized management of cross-border settlement funds, requiring that settlement funds must be stored centrally in the central bank's clearing accounts; second, the inclusion of the Digital Currency Research Institute in the notification scope, embedding the potential cross-border application of digital Renminbi into the evolution path of existing infrastructure. Under a unified framework of regulatory subjects, applicable objects, and technical routes, the new rules aim to reconstruct the "underlying rules" of the cross-border payment system rather than merely fine-tuning operational details.
System and Business Scope
The new business rules systematically reorganize the business boundaries of the Renminbi cross-border payment system, expanding the coverage from traditional cross-border clearing to a richer array of settlement and supporting services. According to public information, the new rules clarify that CIPS supports six types of cross-border settlement business forms, including real-time gross settlement, timed net settlement, payment versus payment (PvP), and delivery versus payment (DvP), forming a "multi-track parallel" settlement system. Compared to the 2018 version, the new version places greater emphasis on the synergy and combinability between different settlement models, integrating originally relatively independent functional modules through unified rules and interfaces, facilitating participating institutions to complete the entire process from real-time gross processing to net centralized clearing, and then to PvP and DvP risk hedging within the same system, enhancing the scalability and safety margin of Renminbi cross-border settlement as infrastructure.
Fund Concentration and Liquidity
In terms of fund management, one of the most notable arrangements in the new rules is the explicit requirement that cross-border settlement funds must be centrally stored in the central bank's clearing accounts. This means that the core clearing funds in the cross-border payment system are uniformly managed within the central bank system. This move significantly enhances the People's Bank of China's visibility and overall scheduling capability regarding cross-border settlement fund positions, allowing regulators to grasp the flow and scale changes of cross-border funds in real-time, enabling quicker intervention in liquidity support or risk disposal under stress scenarios. Meanwhile, this centralized model compresses the space for commercial banks to manage their own positions and fund accumulation based on settlement funds, potentially raising the internal liquidity management costs for some institutions. Given the current lack of authoritative public data on the scale of commercial banks' cross-border settlement fund accumulation, it is difficult to assess the specific quantitative impact. Some market commentary suggests that the new rules "tighten every node through a mixed settlement mechanism" (this statement is a viewpoint pending verification), with the technical implication being a combination of real-time gross and timed net, as well as embedded use of PvP and DvP, reducing the free stay and term mismatch space of funds between system nodes, thereby tightening the systemic liquidity looseness from institutional and mechanistic levels.
Digital Renminbi Layout
The new rules include the Digital Currency Research Institute of the People's Bank of China in the notification scope, indicating that the technical and business teams of digital Renminbi are formally included as "listeners" in the cross-border payment rules system, reserving institutional interfaces for future connections. From an organizational structure perspective, this provides a pre-arrangement for the future access of digital Renminbi to CIPS or the formation of interoperable relationships with it, ensuring compliance and governance. According to a single market source commentary, including the Digital Currency Research Institute in the notification scope is seen as "reflecting strategic preparation for the cross-border application of digital Renminbi." Although this judgment still requires more official information for confirmation, it at least shows that regulators have simultaneously considered the potential embedding path of digital form currencies when formulating traditional payment system rules. Combined with the new rules' unified specifications for settlement models, account systems, and participant obligations, it can be expected that they reserve expandable interfaces and pilot space for future digital Renminbi participation in cross-border settlement in terms of technical standards, message formats, identity recognition, and compliance review.
Benchmarking the SWIFT Framework
From a system architecture perspective, the Renminbi Cross-Border Payment System (CIPS) fundamentally differs from SWIFT in terms of clearing models and control over the settlement layer. SWIFT primarily provides a messaging network and does not undertake clearing and settlement functions itself; funds ultimately circulate within the clearing systems of various countries or commercial banks' accounts. In contrast, CIPS integrates clearing and settlement functions under unified rules, and the new rules require that settlement funds be concentrated in the central bank's clearing accounts, making control over the settlement layer more centralized within the Chinese central bank system. This architecture provides a more direct technical and institutional basis for embedding PvP and DvP mechanisms in cross-border payments, allowing for synchronous delivery of "money for money" and "money for securities" at the system level through PvP and DvP in foreign exchange transactions or cross-border securities settlement scenarios, effectively alleviating principal risk in traditional cross-border transactions. According to research briefs, CIPS now covers 109 countries and regions globally (this data comes from a single source). Within the global payment network landscape, it presents a positioning of coexistence with SWIFT, complementing specific currencies and regions. The new rules, by strengthening settlement control and diversifying settlement models, are expected to enhance the usage rate of Renminbi pricing and settlement while providing participants with alternative paths to hedge against certain sanctions and geopolitical risks.
Policy Coordination and Coverage
The upgrade of CIPS business rules forms a policy synergy with the "Implementation Plan for the High-Quality Development of Digital Finance in the Banking and Insurance Industries," which clearly proposes to explore the application directions of cutting-edge technologies such as blockchain in financial infrastructure, providing top-level guidance for the digital transformation of key systems, including cross-border payments. Within this framework, the new rules lay the institutional foundation for future introduction of technologies such as blockchain and smart contracts in cross-border payment scenarios through unified business rules, strengthened fund concentration, and reserved technical interfaces. According to information from a single source, the current CIPS system has covered 109 countries and regions globally. This coverage means that once the relevant rule adjustments are implemented, they will have cross-border spillover effects, impacting not only domestic financial institutions but also extending to overseas participating banks and their corporate clients. Under the promotion of policy coordination, cross-border payment infrastructure is evolving towards "digitalization and compliance integration," integrating identity recognition, fund clearing, compliance review, and data retention into the same technical stack within a unified regulatory framework, thereby providing space for subsequent innovations such as digital Renminbi and blockchain settlement.
Market Impact Outlook
Surrounding the new rules, an unavoidable core contradiction is the significant enhancement of the central bank's control over the cross-border payment system, which creates tension with the traditional demand of commercial banks to achieve accumulation and flexible position management through settlement funds. The concentration of funds in the central bank's clearing accounts will compress the pool of low-cost settlement funds available to commercial banks in the short term, raising funding costs for some institutions and forcing them to adjust their internal liquidity management models. At the same time, the unified and strict regulatory framework will raise the compliance threshold and operational requirements for cross-border business, requiring enterprises to adapt to new processes and monitoring mechanisms in trade settlement and fund allocation. In the short to medium term, the impact on banks will mainly manifest in liquidity structure reorganization, increased compliance investment, and re-evaluation of cross-border business pricing; for enterprises, it will focus on adjustments in settlement efficiency, cost structure, and compliance review pace. Future observations should focus on three dimensions: first, the specific implementation pace of the new rules and accompanying technical transformations; second, the advancement path and speed of digital Renminbi cross-border pilots within the CIPS ecosystem; third, changes in the number and activity of overseas participating institutions, as well as the actual responses of different regions to the upgrade of Renminbi cross-border settlement rules.
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