This was usually achieved by shutting them out of the combined Swift and Chips global banking system through which an estimated 90pc of the world’s money is moved across borders. Chinese officials were particularly alarmed by the West’s decision to cut off Iran’s access in 2012 as part of international efforts to deprive Tehran of the funds needed to develop nuclear weapons.
China’s answer to this glaring vulnerability was to bypass the existing framework and create its own version: the Cross-Border Interbank Payment System, or ‘CIPS’, in 2015.
Again, there are widespread doubts about how effective it will be. In testimony to the powerful House Financial Services Subcommittee on National Security in 2022, the Washington-based think tank The Centre for a New American Security dismissed both CIPS and the digi-yuan as immediate threats to…
