China expands USD bypass

China is widening the pipes for cross-border payments that can avoid U.S. dollar clearing, with new rules for its CIPS network now in force and a Shanghai policy push to connect more banks. (www.gov.cn) CIPS, China’s Cross-border Interbank Payment System, said it had 194 direct participants and 1,597 indirect participants as of April 16, 2026, and processed 180 trillion yuan of annual business volume in 2025. Its website also showed average daily volume rising to 920.5 billion yuan in March 2026 from 619.7 billion yuan in February. (cips.com.cn) The People’s Bank of China revised CIPS rules on Dec. 26, 2025, with the changes taking effect on Feb. 1, 2026. The update standardized participant accounts, settlement-fund ownership, liquidity management, queue handling, cancellations and returns. (www.gov.cn) Beijing had already signaled a broader buildout on April 21, 2025, when regulators and Shanghai officials released an 18-point plan that called for upgrading CIPS, expanding its global coverage and using blockchain in yuan-denominated trade, shipping, investment and financing settlement. (english.shanghai.gov.cn) This push comes as sanctions risk keeps shaping payment choices. The Atlantic Council wrote on March 30, 2026, that China is the top purchaser of Iranian oil and that related transactions are increasingly settled in yuan through indirect channels that reduce exposure to U.S. financial oversight. (atlanticcouncil.org) The practical issue is plumbing, not slogans: banks need a messaging system, a settlement asset and counterparties willing to use both. CIPS gives banks a China-linked route for renminbi settlement even though SWIFT still dominates global financial messaging. (cips.com.cn) (swift.com) The renminbi is still small beside the dollar in global payments. SWIFT’s July 2025 RMB Tracker said the Chinese currency accounted for 2.88% of global payments by value in June 2025, ranking sixth; in trade finance, its share was 5.94%, while the dollar’s was 82.75%. (swift.com) China is also testing newer rails alongside conventional bank settlement. Project mBridge, launched in 2021 by the Bank for International Settlements and the central banks of China, Hong Kong, Thailand and the United Arab Emirates, reached a “minimum viable product” stage before the BIS said in October 2024 that the partners could carry it forward without the BIS. (globalbankingandfinance.com) Banks outside China are responding to client demand for more than one settlement route. Reuters reported on April 21, 2026, that Ecobank is in talks with Bank of China on a direct local-currency-to-yuan settlement product for African customers by year-end. (msn.com) The result is not a dollar replacement so much as a larger menu of payment rails. China is building more of that menu into law, into bank connections and into the daily operations of cross-border trade. (www.gov.cn) (cips.com.cn)