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, according to a report from the investment banking unit of Bank of China, Reuters reports. The bank’s chief economist Guan Tao was previously a director of the international payments department of State Administration of Foreign Exchange (SAFE). 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. Supervised by the central bank, CIPS said it processed 135.7 billion yuan (US$19.4 billion) a day in 2019, with participation from 96 countries and regions. It also recommended that China develop legislation similar to the European Union’s Blocking Statute, which allowed the EU to sustain trade and economic relations with Iran, a country targeted by U.S. sanctions.

Source: The Standard July 29, 2020 06:33 UTC