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In the global economy, sentiments hold no value; only the flow of money determines who survives and who is eliminated. For decades, the United States, relying on the dollar, SWIFT, and the CHIPS clearing network, has engineered not only trade but also the political behavior of countries. Every money transfer has been a point of pressure; every access cut, an economic decree. However, a power built on “infrastructure,” if abandoned, collapses suddenly – not with an explosion, but with a gradual dimming of the levers. This is where CIPS enters the game; not as a peripheral tool, but as a rewriting of cross-border payment rules. Following the war in Ukraine, when sanctions became the official weapon of the West, China swiftly built an ecosystem that directly bypasses the dollar-centric logic of the global economy. The growth of CIPS is not accidental; it is a strategic reaction to a world that has realized financial dependence is the most dangerous form of dependence. The question is not whether the dollar is weakening or not; the question is whether the West, by excessively using the tool of sanctions, is itself implementing a controlled and legal death of its financial hegemony?
Introduction to CIPS and its Difference from SWIFT
Many mistakenly believe CIPS is merely China’s version of SWIFT. This is a dangerous oversimplification. SWIFT is simply a secure “messaging” system (like WhatsApp for banks) that transmits payment instructions, but does not move money. But CIPS both transmits messages and performs “settlement.” This system, launched by the People’s Bank of China (PBOC), allows global banks to conduct their transactions directly in yuan (RMB), without needing to go through American correspondent banks or convert to dollars.
Technical and Operational Structure
- Direct Participants: Banks that have direct accounts with CIPS (often Chinese banks and some large foreign banks in China).
- Indirect Participants: Banks worldwide that connect to the network through a direct bank.
- Settlement Time: Almost instantaneous (Real-Time), bringing the risk of currency fluctuations close to zero.
Stunning Statistics of 2024: The Quantum Leap of the Dragon
The data we have is no joke. If yesterday CIPS was an experimental project, today it is an undeniable reality in the market.
- Transaction Volume: In 2024, transaction volume grew by 43 percent to an astonishing 175 trillion yuan (equivalent to about $24 trillion). To understand the magnitude of this number, it is enough to know that it exceeds the GDP of many economic superpowers.
- Number of Members: More than 1,700 financial institutions from around the world have joined the network.
- Geographic Coverage: CIPS clearing banks are located in 33 countries and practically cover all continents.
The Impact of the Ukraine War on CIPS: A Catalyst for Growth
The moment the West cut off Russia’s access to SWIFT, an alarm bell rang for all independent economies. Trust in the Western financial system collapsed. Since the start of the war in Ukraine, the number of banks participating in the Chinese system has increased by about one-third. Countries have realized that dependence on the dollar means entrusting the lifeline of their country to Washington.
Here is a strategic analogy: when a vital system (like the dollar) suffers an incurable “politicization” disease, countries seek a dignified and systematic exit. Joining CIPS is also an attempt by countries to free their financial fate from the pain of dollar sanctions. This is a choice for the “death of dependence” and the “birth of independence.”
Expansion to the Middle East and Africa: A Strategy to Encircle the Dollar
China has cleverly focused its attention on energy resources and emerging markets.
Turkey: A New NATO Player on China’s Turf
The joining of Turkish banks to CIPS in 2024 was a major geopolitical signal. Turkey, as a NATO member and a bridge between Asia and Europe, has effectively said “no” to the absolute hegemony of the dollar with this move. This means that even Western military allies no longer have full trust in its financial system.
Cooperation with the UAE: The Gateway to MENA
The agreement signed in June 2024 is a turning point for the Middle East and North Africa (MENA) region. The United Arab Emirates, as the region’s financial hub, is now the gateway for yuan to North African oil and trade markets. This means:
- Oil sales will be facilitated in yuan (Petro-yuan).
- African countries burdened by dollar debt will find a new breath of fresh air.
CIPS and the Concept of Financial Sovereignty
Why do countries take the risk of changing systems? It’s not just about lower fees or faster speeds; it’s about “national security.” In the current system (SWIFT/dollar), the US is a “global police” that can monitor, block, or fine any transaction. But in CIPS, sovereignty is transferred to Beijing, which currently follows a policy of non-interference in the internal affairs of countries.
In the new financial system, countries want to have economic life rights regardless of Washington’s political judgments (on human rights, nuclear issues, etc.). CIPS is a tool that provides this “right to choose”; a tool that does not allow a country’s economy to be tortured by forced sanctions.
Challenges and Realities: The Dollar is Still King!
We must not delude ourselves. CIPS has grown, but the dollar is still king.
- Market Share: The dollar still holds about 80% of global trade finance, while the yuan is rising to 4th or 5th place.
- Liquidity: The depth of China’s capital market is still not as large as that of the United States. Converting yuan to other currencies in very large volumes may face liquidity challenges.
- Capital Control: China still maintains strict controls on capital outflow, which is a barrier for large global banks.
However, the trend is more important than the current situation. The slope of the CIPS chart is upward, and the slope of the dollar is downward.
The Role of Central Bank Digital Currency (e-CNY) in CIPS
China is the most advanced country in the field of national digital currency (CBDC). The integration of e-CNY with CIPS could completely change the game. The mBridge project, which is being implemented in cooperation with China, the UAE, Thailand, and Hong Kong, allows transactions to be conducted directly between central banks and on the blockchain platform. This means completely eliminating intermediary banks and achieving lightning speed in transactions. Here, blockchain technology and CIPS regulations are combined to perform the process of “dollar elimination” with surgical precision.
Preparing for a Multipolar World
In short, we must say that the era of unipolarity is over. If your business, investment, or analysis is still 100% based on the dollar, you are gambling on the losing horse.
With a transaction volume of $24 trillion, the CIPS system is no longer a “project” but a “giant.” The joining of Turkey and the UAE shows that even US allies are diversifying their eggs into various baskets.
The global financial world is undergoing a major surgery. For countries that have suffered under the yoke of sanctions for years, CIPS is like the medicine that ends the pain and allows them to experience a new life in their economic form. Additionally, the following 3 actions are recommended:
- Traders should learn how to open yuan accounts.
- Analysts should take the weekly CIPS data as seriously as the Federal Reserve interest rate.
- Policymakers should provide infrastructure for connecting to this network as soon as possible.
Time is passing. Either align yourself with the changes, or you will be crushed by the gears of history.
Examining the dimensions of the decline of the liberal world order
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