According to the South China Morning Post report, Finance Gateway Information Service was registered in Beijing last month with €10 million (US$12 million) as incorporation capital. SWIFT is the largest shareholder, followed by China National Clearing Centre, a wholly-owned domestic settlement subsidiary of the People’s Bank of China. A joint venture between SWIFT and the department responsible for China’s proposed central bank digital currency is being viewed as a sign that Beijing is exploring the global use of its planned sovereign digital currency and aiding its desire to internationalize the yuan.
China looks to reduce its dependency on the US Dollar.
China has been looking to reduce its reliance on the US dollar by increasing the global use of the yuan amid deteriorating relations with the United States. It remains unclear at this stage as to the scope of the joint venture between SWIFT and both the Digital Currency Research Institute and the China National Clearing Centre within the PBOC, but the development of the digital yuan could help promote its international use and support the nation’s push to rival the US as a global economic power, analysts said.
SWIFT has been part of China’s financial markets for more than 30 years.
“We have been part of China’s financial markets for more than 30 years … and, as we do everywhere we operate, we make adjustments as necessary to remain compliant with regulatory requirements,” SWIFT noted in a statement. In the past, the SWIFT system afforded Washington broad powers to impose economic and financial sanctions against countries, leaving them unable to receive payments for exports, pay for goods or own US dollar-denominated assets. Several others from the finance industry have noted that the Chinese digital yuan could threaten the US dollar’s global dominance.