International payments organisation the Society for Worldwide Interbank Financial Telecommunication (SWIFT) has teamed up with the Digital Currency Research Institute of the People’s Bank of China (PBOC) and others to launch a new joint-venture.
On 15 January Jinrong Wangguan Xinxi Fuwu Co., Ltd. (Financial Gateway Information Services Co., Ltd.) (金融网关信息服务有限公司) was established in Beijing as a joint-venture between SWIFT and several of China’s leading financial organisations, including the China National Clearing Centre (CNCC), PBOC’s Digital Currency Research Institute, the Cross-border Interbank Payment System (CIPS) and the Payments and Clearing Association of China (PCAC).
Financial Gateway Information Services has registered capital of 10 million euros, with SWIFT contributing 5.5 million euros for an equity stake of 55%. CNCC made a capital contribution of 3.4 million euros for an equity stake of 34%, while PBOC’s Digital Currency Research Institute and PCAC each made a contribution of 300,000 euros for 3% equity stakes.
The business scope of the new company includes information system integration, data processing and technical consulting.
SWIFT project manager Aidan McGrattan said to 21st Century Business Herald that SWIFT had been a part of China’s financial markets for over three decades, and had helped to connect China with the global financial system.
McGrattan said that SWIFT had established the new joint-venture in order to obtain the required licenses for its local activities within China, and better abide by Chinese regulations.
The establishment of the joint-venture arrives amidst ongoing trials of China’s central bank digital currency (CBDC) – also referred to as the digital renminbi, which were first launched in cities around China in April 2020.
Analysts have speculated that the digital renminbi could sideline or replace established payments systems such as Alipay, Tencent Pay and SWIFT.