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Russian banks are joining CIPS now, and likely other countries will as well. You're getting money to Chinese banks because presumably you are buying something

Russian banks are joining CIPS now, and likely other countries will as well. You're getting money to Chinese banks because presumably you are buying something from someone that has an account there, not for safeholding.

kasey_junk 5y ago
It’s going to take a long time for international companies to get the yuan/cips/China bank corridor working, those relationships don’t get built quickly and most places that aren’t dealing directly with China don’t bank there (as opposed to the UK, Ireland or other countries that act as banking nexus’. Those Chinese banks can’t even be used for traditional style fx management because you’ll have to double fx from local currency to yuan and yuan to ruble. The yuan fx scene is much less efficient and liquid as well. What this more likely does is set Russian & Chinese firms to trade with each other. That looks a lot like the North Korea relationship.
- sudosysgen 5y ago
  No, Russian banks are also joining CIPS, so there is no need for double Forex. Chinese banking has actually spread around the world a lot more than you'd think. They aren't starting from zero. And also, CIPS software-wise is designed to be a plug-in replacement for SWIFT.
  - kasey_junk 5y ago
    If I’m a modern treasury that needs to do business in Russia the China corridor requires me to fx to yuan and the fx yuan to ruble. As of now both of those currencies are hard to fx. It’s also hard (relatively) to setup Chinese accounts. I work in the industry and have seen Chinese banking normalize a bit especially in Africa but comparatively it is tiny and hard to manage. Singapore for instance is a more likely spot to setup banking operations for most companies. The issue is that these are long term trends. It will take decades to make China a finance nexus on the order of modem banking centers in the west and that presumes China continues to liberalize their currency and finance regime which is not the current trend.

kasey_junk 5y ago

It’s going to take a long time for international companies to get the yuan/cips/China bank corridor working, those relationships don’t get built quickly and most places that aren’t dealing directly with China don’t bank there (as opposed to the UK, Ireland or other countries that act as banking nexus’. Those Chinese banks can’t even be used for traditional style fx management because you’ll have to double fx from local currency to yuan and yuan to ruble. The yuan fx scene is much less efficient and liquid as well. What this more likely does is set Russian & Chinese firms to trade with each other. That looks a lot like the North Korea relationship.

sudosysgen 5y ago
No, Russian banks are also joining CIPS, so there is no need for double Forex. Chinese banking has actually spread around the world a lot more than you'd think. They aren't starting from zero. And also, CIPS software-wise is designed to be a plug-in replacement for SWIFT.
- kasey_junk 5y ago
  If I’m a modern treasury that needs to do business in Russia the China corridor requires me to fx to yuan and the fx yuan to ruble. As of now both of those currencies are hard to fx. It’s also hard (relatively) to setup Chinese accounts. I work in the industry and have seen Chinese banking normalize a bit especially in Africa but comparatively it is tiny and hard to manage. Singapore for instance is a more likely spot to setup banking operations for most companies. The issue is that these are long term trends. It will take decades to make China a finance nexus on the order of modem banking centers in the west and that presumes China continues to liberalize their currency and finance regime which is not the current trend.