A significant milestone in the internationalization of the Chinese currency is set to unfold during the 2025 Lujiazui Forum. From June 18 to 20, the Cross-border Interbank Payment System (CIPS) will host a dedicated session at the Shanghai World Expo Exhibition and Convention Center, where it will officially launch its new Renminbi (RMB) International Letter of Credit (L/C) services.

As China's central cross-border RMB payment clearing system, CIPS was established with approval from the People's Bank of China to serve global financial institutions engaged in RMB cross-border settlements. As of May 2025, CIPS counts 174 direct participants and 1,509 indirect participants, connecting over 4,900 banking institutions across 187 countries and regions.

A New Chapter in Trade Finance: RMB International L/C via CIPS

The newly introduced RMB International Letter of Credit serviceis designed to enhance the efficiency and security of cross-border trade finance. Through CIPS, users can execute the full L/C lifecycle — issuance, notification, amendment, and settlement — entirely in RMB, offering a streamlined solution for global trade partners.

Key benefits include:

Efficient Cross-Border Settlements: As the primary infrastructure for RMB cross-border clearing, CIPS significantly reduces settlement time and boosts capital utilization efficiency.

Alignment with International Standards: The service adheres to globally recognized trade finance protocols, ensuring operational transparency and fostering global acceptance.

Robust Risk Mitigation: As a form of bank-backed guarantee, L/Cs reduce payment and delivery risk in trade transactions, bolstering confidence among counterparties.

Trade Finance Enablement: The facility provides liquidity support for exporters and importers, helping businesses improve cash flow and enhance their international competitiveness.

Enabling Global Trade, Enhancing Currency Internationalization

The launch of the RMB L/C service is poised to deliver a range of benefits for the global trade and finance ecosystem:

Accelerating RMB Internationalization: By expanding the use of RMB in cross-border trade and investment, CIPS is reinforcing the currency's role in the global financial system.

Improving Payment Efficiency: Leveraging CIPS for RMB-denominated L/C transactions facilitates faster settlements, reduces costs, and improves transaction transparency.

Deepening Bank-Corporate Collaboration: The special forum during the Lujiazui event will serve as a catalyst for enhancing cooperation between financial institutions and enterprises, strengthening the overall cross-border financial services landscape.

Looking Ahead: A Platform for Innovation in Cross-Border Finance

With the introduction of RMB-denominated L/C services, CIPS is expected to broaden its service offerings and strengthen its position as a global infrastructure for financial innovation. It opens doors for:

New financial products and instrumentstailored for international markets;

Deeper integrationof Chinese and global financial networks;

Greater use of RMBin global trade settlement, supporting long-term strategic goals of China's financial opening-up.

As more companies and financial institutions adopt RMB for cross-border transactions, this development is set to enhance liquidity, reduce friction in trade financing, and elevate China's role in the global financial order.

The official rollout of CIPS'RMB International Letter of Credit service marks a pivotal step in enhancing the efficiency, security, and global accessibility of China's cross-border payment infrastructure. Through the 2025 Lujiazui Forum and dedicated CIPS sessions, China aims to further strengthen its collaboration with international financial institutions and enterprises — driving high-quality growth in global financial connectivity.