Cambodia is looking to become a member of the Chinese CIPS, aiming to streamline cross-border payments and boost Chinese investors, businesses, and tourists, particularly bilateral trade with China and recipients of yuan payments.
During a meeting with Chinese President Xi Jinping, Prime Minister Hun Sen requested that Cambodia join the CIPS (Cross-Border Interbank Payment System), which administers China's cross-border payment system.
At a press conference on Monday, Chea Serey, Assistant Governor and Director General of National Bank of Cambodia (NBC), said that the CIPS participation process will run positively as a result of the understanding of the CIPS participation requirements and the success of the recent bilateral meetings between Cambodian and Chinese leaders.
"NBC has studied their requirements in detail for participation in the CIPS system since the system was initially formed in 2015,” she said.
“So, the National Bank knows their requirements, which is nothing new for us. Also, the leaders of the two nations met and discussed an agreement in principle. This will hopefully speed up Cambodia's accession to CIPS. "
She said that Cambodia will gain several benefits by adopting CIPS, including more payment options for the globe and region, and enabling and boosting commerce, investment, and tourism in general. Particularly, bilateral trade in RMB with China and recipient countries, as well as international reserve investment in RMB in Cambodia.
"It isn’t certain that all CIPS transactions are cheaper than SWIFT, nor that all SWIFT transactions are cheaper than CIPS. So, when there are two options, we will profit,” she said. "So, if one side costs less and gives us greater profit, we will use it."
CIPS is similar to the SWIFT system, which is an international payment system. It was established by the Bank of China in 2015.
Currently, it has at least 76 direct members and 1,265 indirect institutions from 106 countries, including 965 from Asia, 185 from Europe, 86 from Africa, 29 from North America, 23 from Oceania, and 17 from South America. Its goal is to support the internationalization of the Chinese yuan.
Cambodia is expected to join the China Interbank Payment System (CIPS) soon, following a recent bilateral meeting between the two countries' leaders in Beijing.