Pan Gongsheng Sets the Tone for Cross-Border Payment System Interconnection, with CIPS and Digital Renminbi as a "Dual-Drive" to Reduce Costs and Improve Efficiency in Trade Finance

Faced with remittance costs of up to 6.5% and settlement cycles spanning several days in global trade, the “dual-wheel” drive of CIPS and Digital Renminbi is fundamentally reshaping the efficiency logic of cross-border payments.

Text | Huamao Rong Finance Content Team

Produced by | Trade Finance

Pang Gongsheng’s clear statement at the 2026 China Development High-Level Forum placing cross-border interconnection of payment systems as a strategic priority marks a new phase focused on deep integration and effective output, following the coordinated upgrade of related infrastructure.

Traditional cross-border payments face the “three highs” issues: high friction costs, long time consumption, and opaque operations. As supply chains demand greater resilience and real-time financial management, these have evolved from operational pain points into strategic bottlenecks.

This business reality is the fundamental driver behind systemic reconstruction at the infrastructure level. China’s approach is not to patch up the old agency bank model but to target the core costs and efficiency issues through the coordinated development of two autonomous infrastructure projects: CIPS and Digital Renminbi.

CIPS Ten Years Leap: From Clearing Channel to Global Mainnet

After a decade of operation, CIPS has surpassed its initial role as a cross-border RMB clearing channel. In 2024, it handled cross-border RMB payments totaling 175 trillion yuan.

Its network covers 189 countries and regions, connecting over 4,900 institutions. This network forms the backbone of RMB internationalization in payment and settlement.

The revision of the “RMB Cross-Border Payment System Business Rules” at the end of 2025 marked a key upgrade. The new regulations introduced hybrid settlement and explicitly supported PvP and DvP, aiming to meet diverse settlement needs from general trade to complex financial transactions.

Rapid institutional upgrades have translated into practical capabilities. In Q4 2025, a RMB settlement for iron ore imports on CIPS achieved simultaneous PvP settlement with Australian dollars for the first time.

Given the extreme sensitivity of commodity trade to exchange rate fluctuations and the large transaction amounts involved, the “zero principal risk” settlement provided by PvP offers far more value than speed alone. This transaction signifies that CIPS’s functional upgrade is precisely aligned with the core needs of high-end trade scenarios for settlement certainty.

Its role is evolving from a backend clearing tool to a front-end transaction infrastructure.

Digital RMB 2.0: From Domestic Pilot to Cross-Border Leader

As CIPS consolidates its wholesale network, Digital RMB leverages its technological uniqueness to carve out new paths in cross-border scenarios. The official launch of features like “smart contracts” in early 2026 has propelled its development into a more intelligent, interactive 2.0 stage.

Domestic pilots have accumulated significant scale. By the end of November 2025, total processed amount reached 16.7 trillion yuan.

Its cross-border potential is rooted in the “payment equals settlement” native technology. This can reduce fund arrival times from days to seconds.

More importantly, it fundamentally changes the cost structure of cross-border payments, providing underlying possibilities for banks to design more competitive cross-border payment products.

The multilateral central bank digital currency bridge (mBridge) has become a key testing ground for this potential. By November 2025, the platform had processed 4,047 cross-border transactions totaling 387.2 billion yuan.

Among these, transactions using Digital RMB accounted for 95.3%. This overwhelming share, along with the operational launch of the Shanghai Digital RMB International Operations Center, indicates that Digital RMB is rapidly expanding from domestic retail advantages into cross-border wholesale and specific scenarios.

Dual-Drive Mechanism: Infrastructure Integration and Cost Reduction Logic

CIPS and Digital RMB are not evolving independently but form a deeply integrated “system-level” solution. CIPS, as the wholesale backbone network for large-value payments, ensures finality in interbank settlements.

Digital RMB, relying on its programmability and P2P efficiency, provides “last mile” solutions in supply chain and retail scenarios. It connects with CIPS through channels like mBridge to realize value interconnection.

This synergy produces compounded effects in efficiency, cost, and risk control.

In terms of efficiency, the collaboration can significantly shorten payment chains. In December 2025, Bank of China completed a 103 million yuan cross-border settlement via mBridge in just 30 minutes without intermediary banks.

Its core value lies in leveraging the finality of central bank settlement with Digital RMB to eliminate credit exposure and liquidity management costs caused by cross-timezone netting in traditional agency bank models. This cannot be achieved by mere message transmission acceleration.

In terms of cost, streamlining the chain directly reduces friction costs at intermediate links. A March 2026 report by Standard Chartered Bank noted that overseas companies closely tied to Chinese trade using RMB financing enjoy a cost advantage of 100-200 basis points over USD financing.

In risk control, smart contracts support automatic execution of transaction conditions, while full data traceability greatly enhances regulatory transparency.

Enterprise Impact Map: From Settlement Optimization to Financial Reengineering

The strategic value of the “dual-wheel” drive ultimately depends on validation through corporate financial performance. Its influence is extending from settlement efficiency to deeper financial management.

For large multinational corporations, cross-border cash pooling services based on new infrastructure enable automatic multi-currency fund aggregation and netting. Some banks have shown that optimized processes can reduce a single cross-border RMB settlement from one working day to under 30 minutes.

This efficiency directly improves group capital utilization and enhances financial decision-making agility.

For small and medium-sized enterprises, the impact is even more profound. The new system not only optimizes settlement but also begins to reshape financing logic.

Traditional trade finance faces risk management challenges in verifying the authenticity and uniqueness of trade backgrounds. The verifiable, tamper-proof data stream of digital RMB payment chains, integrating funds and information flows, provides banks with critical inputs for constructing transparent trade background verification models previously difficult to obtain.

This substantially reduces information asymmetry, enabling banks to offer more favorable interest rates to SMEs with genuine trade backgrounds and systematically lowering their financing costs.

Pang Gongsheng’s tone-setting has established a clear action rhythm for the “dual-wheel” drive. Initial cases have demonstrated its potential to improve settlement efficiency and optimize financing costs.

However, the success of national-level infrastructure ultimately depends not just on technological advancement or pilot feasibility but on whether it can become the most optimal financial choice for enterprises in global business activities.

Currently, the system is transitioning from “policy-driven” to “market-driven.” Its ultimate value lies in a predictable “certainty dividend.”

The final measure of success will be whether, based on features like programmability and data trustworthiness, it can spawn entirely new cross-border trade finance products and reshape the global financial management logic of mainstream enterprises.

Efficiency and cost advantages have been empirically validated. The decisive moment will arrive when the cumulative effects of efficiency gains and cost savings finally outweigh the initial resistance caused by system switching and cognitive inertia.

The “singularity” where large-scale, spontaneous adoption by global business networks and financial institutions occurs depends on this.

Entering the first year of the 14th Five-Year Plan, supply chain finance shoulders a key mission in serving modern industrial systems and developing new productive forces. Against this backdrop, the 12th China Supply Chain Finance Annual Conference in 2026 is timely, aiming to gather industry wisdom. Led by national strategies, the conference will explore core topics such as how state-owned enterprises, as “chain leaders,” can empower entire industrial chains, and new cross-border financial solutions under RMB internationalization, seeking feasible paths for financial services to support real economy and industrial upgrading.

The event will address cutting-edge practical challenges and innovative ideas—from digital penetration of commodity “title” blind spots, to new financial models for renewable energy metals trade; from designing “industry-finance-data” closed loops for urban investment and park platforms, to analyzing differentiated risk control logic in live-streaming e-commerce supply chains; from tackling new compliance challenges posed by “penetrative supervision” and the Golden Tax Phase IV, to exploring how “on-balance sheet” data assets reshape risk control and pricing—topics closely aligned with digital transformation, industrial change, and regulatory evolution, aiming to clarify future trends in risk management, technological integration, and ecological co-creation.

This is a valuable platform for addressing real issues and seeking new solutions. You will hear policy insights, learn from exemplary enterprises’ breakthroughs, and engage in in-depth exchanges with industry stakeholders. Whether exploring differentiated strategies for regional small banks or balancing innovation and compliance, sparks will fly in these dialogues. The concurrent “2026 China Supply Chain Finance Industry Benchmarking Awards” aims to honor outstanding practitioners solving these industry challenges. We sincerely invite you to join us in Beijing on April 8, 2026, to co-create a new blueprint for industry development.

This is a key industry event in the field of supply chain finance. We look forward to your participation, sharing insights, and contributing to industry progress.

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