According to Reuters (July 29) a report by the investment banking unit of Bank of China said China should prepare for potential U.S. sanctions by increasing use of its own financial messaging network for cross-border transactions in the mainland, Hong Kong and Macau. The report said greater use of the Cross-Border Interbank Payment System (CIPS) instead of the Belgium based SWIFT system would also reduce exposure of China’s global payments data to the United States, BOC International (BOCI). The report looked at potential measures the United States could take against Chinese banks, including cutting off their access to the SWIFT financial messaging service, a primary network used by banks globally to make financial transactions. It said “A good punch to the enemy will save yourself from hundreds of punches from your enemies. We need to get prepared in advance, mentally and practically.” The report looked at potential measures the United States could take against Chinese banks, including cutting off their access to the SWIFT financial messaging service, a primary network used by banks globally to make financial transactions and said that if the United States were to take the extreme action of cutting off some Chinese banks’ access to dollar settlements, China should also consider stopping using the U.S. dollar as the anchor currency for its foreign exchange controls.
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