Delayed payments system stalls yuan’s global ambitions
Roll-out of CIPS network won't be ready before 2016 due to technical glitches and policy snags
China's quest to turn the yuan into a full-fledged global currency has hit a roadblock, as the planned roll-out of a worldwide payments superhighway looks certain to be delayed by policy snags and technology challenges.
The China International Payments System (CIPS) that would replace a patchwork of networks and allow hassle-free yuan payments was meant to debut later this year, but bankers say it is unlikely to be ready before 2016.
The slippage might be good news for China's big clearing banks, such as Bank of China, and offshore yuan centres such as London or Singapore, which stand to lose their privileged position.
In the long run, however, an efficient global network for yuan trades will be essential for fulfilling Beijing's wish to boost the currency's use.
A spate of agreements on yuan clearing with financial centres in Europe and Asia signed over the past month or so highlighted the importance of such a system for those ambitions.
Yet technological problems and government debate over how much users should be allowed to move in a single day without punching too big a hole in China's capital controls have stymied the system's development, bankers say.