China’s New Trans-Bank Foreign Currency System

The People’s Bank of China launched its new trans-bank foreign currency payment system in late July 2008, says Shanghai Daily. Although foreign currency is banned from circulation on the mainland, authorities have made an exception for payments such as trade insurance payments between enterprises. The system, which was put into inception in February of 2007, is not open to individuals.

Eight currencies, including the euro, yen, U.S. dollar, and the Hong Kong Dollar are covered under the system, making forex trading quicker and more efficient. Prior to the launch of the system, forex transfers could take up to three days to complete. Thus far, eleven Chinese banks, including Shanghai Pudong Development Bank and Industrial Bank, have joined the system.