SWIFT inks JV with China’s central bank

REUTERS/Petar Kujundzic

SWIFT, the global system for financial messaging and cross-border payments, has set up a joint venture with the Chinese central bank‘s digital currency research institute and clearing centre, a move some see as a sign that China wants to explore global use of its planned digital yuan.

Other shareholders of the Beijing-based venture include China’s Cross-border Interbank Payment System (CIPS) and the Payment & Clearing Association of China, both supervised by the People’s Bank of China (PBOC), according to public information.

The new entity, called Finance Gateway Information Services Co, was established in Beijing on Jan. 16, and its business scope includes information system integration, data processing and technological consultancy, according to the website of the National Enterprise Credit Information Public System.

SWIFT and four payments market participants and infrastructure providers are setting up a joint venture to comply with Chinese regulatory requirements,” SWIFT said in a statement to Reuters on Thursday.

The joint venture “will be able to obtain necessary licences for local network management activities … and its services will be limited in scope and entirely focused on maintaining compliance with applicable regulations in China,” it added.

SWIFT set up a wholly foreign-owned unit in Beijing in 2019.

China is a front-runner in the global race to launch central bank digital currencies, having launched domestic trials in several major cities including Shenzhen, Chengdu and Hangzhou.

Its digital currency will help increase oversight of money flows, while also raising the efficiency of cross-border payments and facilitate yuan internationalization, HSBC said in a recent report.

Greater use of the CIPS instead of the Belgium-based SWIFT system would reduce exposure of China’s global payments data to the United States, BOC International (BOCI) said in a report last July.

However, SWIFT said it provides connectivity and messaging services that links market infrastructures and financial institutions to the global financial community.

“Since 2016, SWIFT and CIPS have been working together to offer SWIFT as the secure, efficient and reliable channel to connect CIPS with SWIFT’s global user community,” SWIFT added.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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