This article summarizes the key points of the revised "Rules for the Business of the Cross-border Interbank Payment System," compares the old and new rules, and analyzes the impact on market participants' compliance from a legal perspective. I. Legislative Background and Motivation for Revision The Cross-border Interbank Payment System (CIPS) was officially launched in October 2015. Operated by the Cross-border Clearing Corporation (CIPS operating institution), it provides cross-border and offshore RMB fund clearing and settlement services for domestic and foreign participants, serving as a core financial infrastructure for the RMB internationalization strategy. With the continued deepening of RMB internationalization, CIPS business has grown rapidly, and the number of participating institutions has expanded significantly. The lag in the original 2018 version of the rules at the institutional supply level has become increasingly apparent: First, the setting of participant entry thresholds was not flexible enough, limiting the convenience of access for some overseas institutions; second, the descriptions of account management and fund segregation contained ambiguities, hindering the definition of the rights and interests of all parties; third, with the revision and implementation of the "Anti-Money Laundering Law of the People's Republic of China" in 2025, the compliance connection of message standards also needs clarification; fourth, the cross-border application of digital RMB has entered the practical stage, and relevant operating entities have not yet been included in the formal rule framework. On December 19, 2025, the People's Bank of China officially issued the "Business Rules of the Cross-border Interbank Payment System for RMB" (Yinfa [2025] No. 248, hereinafter referred to as the "New Rules" or "New Regulations"), which will come into effect on February 1, 2026. The original 2018 version of the rules (Yinfa [2018] No. 72) will be repealed at the same time. The revision of the New Rules is a concentrated response to the above-mentioned institutional gaps, and also reflects the proactive deployment of the regulatory authorities—to lower the compliance threshold to attract more overseas institutions to participate, while strengthening fund security and preventing systemic risks. [New Rules Article] Article 1: "In order to regulate the business behavior of the Cross-border Interbank Payment System for RMB (CIPS), prevent payment risks, protect the legitimate rights and interests of CIPS operating institutions and participants, and clarify the responsibilities of all parties, these Rules are formulated in accordance with the "Law of the People's Republic of China on the People's Bank of China" and other relevant laws and regulations." II. Analysis of the Core Revisions of the New Rules (I) Participant Access Management: Substantial Relaxation of the Access Threshold for Overseas Institutions The participant system is a fundamental institutional arrangement of the CIPS business rules. Direct participants (including domestic banks, foreign banks, and specific financial infrastructures) are core nodes of CIPS and are responsible for managing their own liquidity and bearing business risks. Indirect participants (mainly foreign banks) must entrust direct participants to handle their business and do not open accounts with CIPS themselves.Article 5 of the new rules maintains the binary classification framework of "direct participants" and "indirect participants," but makes significant adjustments to the requirements for custodian banks for overseas institutions applying to become direct participants. Article 7 states: "Overseas institutions applying to become direct participants may entrust qualified direct participants as their custodian banks." Compared to the original rule's statement that "overseas institutions should entrust domestic banking direct participants as their custodian banks," the new rules expand the scope of custodian banks from "domestic banking direct participants" to "qualified direct participants," no longer mandating custodian banks for funds. This provides overseas institutions with greater flexibility in access, essentially offering them a wider range of market-based options when choosing custodian banks, which helps attract more diversified overseas financial institutions to the CIPS network. From a legal perspective, this revision lowers the institutional barriers for overseas institutions to rely on domestic institutions, enhancing CIPS's attractiveness to overseas financial institutions (especially non-bank financial institutions). Combined with the supporting policies for the official launch of the Hong Kong CIPS access point in November 2025, this creates institutional synergy, promoting the extension of the CIPS participant network to a wider geographical area and with more diverse institutional types. (II) Account Management System: Zero-Balance Account Rules and Fund Segregation Principles The account system is the cornerstone of CIPS operational security. Articles 8 and 9 of the new rules systematically regulate CIPS account management, clarifying several important legal principles. [New Rules Article 8]: "The CIPS account opened by the operating institution for a direct participant shall be a zero-balance account. This account does not accrue interest, cannot be overdrawn, and the closing balance (day-end) is zero. Funds in the CIPS account belong to the direct participant who opened the account and do not belong to the operating institution's own property. The operating institution shall uniformly manage the participants' accounts. A direct participant can only open one zero-balance account in CIPS." The above clause establishes at least three important legal principles: the zero-balance principle (CIPS accounts should be zero at the end of the trading day, not accrue interest, and cannot be overdrawn, ensuring no credit risk); the principle of ownership (funds clearly belong to the direct participant, and the operating institution does not have ownership or lien rights); and the principle of a single account (preventing multi-account operations from circumventing supervision). [New Regulations] Article 9: "Operating institutions shall not open accounts in commercial banks to deposit settlement funds of CIPS participants for CIPS business, and shall not create a pool of clearing funds.""The new rules further clarify that operating institutions must open a clearing account with the People's Bank of China to centrally store participants' settlement funds. These funds must not be deposited in commercial banks, nor should they be subject to clearing fund accumulation. This move brings CIPS settlement funds under the direct supervision of the central bank, effectively isolating commercial bank credit risk and strengthening the stability of the payment system. (III) Settlement Mechanism: Hybrid Settlement Model The hybrid settlement model combines the finality of RTGS with the efficiency advantages of DNS. It allows participants to choose the most suitable settlement channel based on the nature of their business, optimizing overall liquidity management while ensuring the security of key payments. This is an important manifestation of CIPS's alignment with the international standard of Principles for Financial Market Infrastructures (PFMIs). [New Rules] Article 17: "CIPS shall support the hybrid settlement model to meet the settlement needs of different payment businesses. CIPS shall settle the full amount of each payment business initiated by direct participants in real time, and net the payment business initiated by direct participants in batches on a regular basis. Operating institutions may adjust the netting sessions and times of the regular net settlement according to business needs, and the adjustment shall take effect on the same day." Specifically, the new rules establish the following arrangements at the settlement mechanism level: Real-time Gross Settlement (RTGS) applies to payment transactions initiated on a transaction-by-transaction basis; Timely Net Settlement (DNS) applies to payment transactions initiated in batches, compressing net positions through multilateral netting; and operating institutions have the right to make flexible adjustments. In addition, the new rules clarify that CIPS supports various settlement businesses such as RMB payments, RMB-foreign currency simultaneous settlement (PvP), delivery versus payment (DvP) settlement, and central counterparty clearing. [RTGS and DNS Mechanisms] Real-time Gross Settlement (RTGS) is the common mode of major international SIPS, with funds settled in real time on a transaction-by-transaction basis, and strong payment finality, but it has a high intraday liquidity requirement for participants. Timely Net Settlement (DNS) compresses participants' net positions through multilateral netting, saving liquidity, but there is a certain amount of intra-system credit exposure. (IV) Message Standards and Anti-Money Laundering Compliance: New Law Connection Requirements Article 28 of the new rules embeds anti-money laundering compliance requirements at the CIPS message standard level, which is one of the most practically significant provisions in the field of financial compliance in this revision. [New Regulations] Article 28: "The operating institution is responsible for formulating and publishing CIPS message standards, and the relevant standards shall implement the relevant requirements of anti-money laundering laws. Direct participants shall promptly modify their relevant business systems in accordance with the latest message standards published by the operating institution."The institutional background of this clause lies in the revised Anti-Money Laundering Law of the People's Republic of China, which came into effect in 2025, imposing higher requirements on financial institutions' obligations regarding suspicious transaction reporting, customer due diligence (CDD), and transaction record retention. Embedding anti-money laundering requirements into the message standard means that CIPS participants must convey sufficient information about the transacting parties through message fields when processing each cross-border payment to meet the technical requirements for anti-money laundering penetration identification. It is noteworthy that the People's Bank of China explicitly rejected the suggestion to make the "Business Type" field in the message optional, arguing that this field is a key element of payment transaction background information and is conducive to improving compliance. This attitude clearly demonstrates the regulatory stance on strengthening the transparency of cross-border payments. The "Business Type" field (e.g., identified as trade in goods, trade in services, direct investment, etc.) is a fundamental element of anti-money laundering transaction monitoring. Its mandatory requirement will drive participants to improve their internal transaction classification systems, ensuring that each cross-border payment can be accurately categorized, thereby providing a high-quality data foundation for subsequent customer due diligence, risk rating, and suspicious transaction reporting. III. The inclusion of the "Digital Currency Research Institute" in the notification of new rules for the cross-border application of the digital yuan for the first time carries significant institutional signaling. In conjunction with the concurrent policy background, the People's Bank of China (PBOC) issued the "Action Plan on Further Strengthening the Management and Service System and Related Financial Infrastructure Construction of the Digital Yuan" on December 29, 2025, clarifying the launch of the new generation digital yuan system on January 1, 2026. Including the Digital Currency Research Institute in the CIPS regulatory framework provides a legal basis for the clearing of cross-border digital yuan transactions through CIPS. From a long-term perspective of financial infrastructure architecture, CIPS may gradually evolve into a comprehensive infrastructure that coordinates traditional interbank cross-border clearing and digital yuan cross-border settlement, forming a "dual-track, complementary" cross-border yuan clearing pattern. [Multilateral Central Bank Digital Currency Bridge (mBridge)] The PBOC has participated in the mBridge project with central banks in Hong Kong, Thailand, and the UAE, exploring the technical implementation path for multilateral CBDC cross-border payments. The inclusion of the Digital Currency Research Institute in the CIPS regulatory framework, forming a policy linkage with the mBridge pilot program, points towards the digital upgrade of RMB cross-border payment infrastructure. IV. Compliance Impact Assessment on Market Participants (I) Direct Overseas Participants: The relaxation of custodian bank requirements is the most direct benefit to overseas institutions.The new rules grant overseas institutions greater autonomy in their choices, which is expected to reduce their access costs and enhance the attractiveness of CIPS to financial institutions in emerging markets. In terms of compliance, direct participants overseas need to pay close attention to the changes in message standards and the mandatory requirement to fill in the "Business Type" field. (II) Domestic Direct Participants (Agent Banks): The revision of the participant management regulations grants direct participants certain rights to jointly formulate rules at the procedural level. At the account management level, the legalization of the zero-balance account system requires direct participants to optimize their intraday liquidity management strategies and to meticulously coordinate the timing of RTGS and DNS business arrangements. (III) Indirect Participants: The new rules clarify that indirect participants do not open accounts in CIPS but must still entrust direct participants to act as agents for their business. Indirect participants need to closely monitor the progress of their entrusted banks' message system upgrades and establish a sound mechanism for transmitting original transaction information to prevent compliance risks caused by missing message fields. V. Conclusion The new version of the "Business Rules of the Cross-border RMB Payment System" is the most important rule iteration in the seven years of CIPS system operation. From a macro perspective, this revision organically unifies four dimensions: market opening, system security, enhanced compliance, and forward-looking planning. It reflects the regulatory logic of driving the quality and efficiency of RMB internationalization through institutional development. For domestic and foreign financial institutions, the implementation of the new rules presents both compliance pressure and opportunities for strategic positioning. It is recommended that relevant institutions, while ensuring the compliant implementation of system upgrades, reassess the strategic positioning of CIPS within their cross-border RMB business and seize the business expansion opportunities brought about by the rule adjustments. [Zhong Lun Law Firm: Fang Jianwei, Chen Yi'an, Yuan Chenhao]