The financial industry is highly anticipating the launching of the yuan for international use through China International Payment System (CIPS), which could take place as early as September or October this year.
Reuters reported that the CIPS will be used for worldwide payments using yuan and will replace the old network system, thereby allowing easy yuan transactions and enhancing the use of the Chinese currency in international or global transactions.
"The CIPS is ready now and China has selected 20 banks to do the testing, among which 13 are Chinese banks and the rest are subsidiaries of foreign banks," a senior bank official told Reuters.
"The official launch will be in September or October, depending on the results of the testing and preparation," the official said.
The report said that the Chinese government is doing all efforts to launch the first phase of the CIPS before December.
The CIPS system would allow hassle-free transactions, which could have positive results for China's international transactions.
Although some bank experts say that the international clearing platform took several years to develop, its basic function could markedly improve access for foreign financial firms as well as accelerate the process of internationalizing the Chinese currency.
For the first time, the CIPS will place yuan on equal position with other world currencies in terms of risk reduction, operating hours and maximizing liquidity.
The system's key features have more to say for its efficiency. These features include international reporting with multilanguage features; cross-border yuan clearing for both onshore and offshore clients; and simultaneous handling of payments in 17 time zones in Asia, the Americas, Africa and Europe.