Description

About the Seminar

China watchers have decried the emergence of the Cross-Border Interbank Payment System (“CIPS”) as a turning point in the move to dethrone the U.S. dollar. This Article situates CIPS, which clears and settles Chinese renminbi transactions, with other financial market infrastructures, drawing lessons from how those entities have thrived or failed. In recent conversations, CIPS has been conflated with other infra-structures (e.g., the SWIFT payment messaging system) and currency trends (e.g., de-dollarization and sanctions evasion). However, a currency clearinghouse is very different than most financial institutions. For CIPS, the market-maker in the adjacent trading market is the Chinese government, a sovereign state that wields a mono- poly over the renminbi. Although the global currency trading market exhibits competition, monetary sovereignty complicates the analysis of monopolization. This Article’s primary contribution is to present a coherent theoretical framework for CIPS by synthesizing the treatment of currency clearinghouses across law, finance, and economics. The Article concludes that CIPS cannot, by itself, guarantee widespread acceptance of the renminbi.

About the Speaker

Felix B. Chang teaches and writes on antitrust, financial regulation, and trusts & estates. His research focuses on the ability of infrastructures to suppress competition in the financial markets as well as the relationship between inheritance law and wealth inequality. His current work, supported by a Fulbright scholar grant, looks at the competition between Singapore and Hong Kong to manage private Chinese wealth. Prior to joining Ohio State, Professor Chang was the Associate Dean for Faculty and Research at the University of Cincinnati College of Law, where he also served as Co-Director of the Corporate Law Center. In addition, he has been a visiting professor or visiting scholar at Hong Kong University, National Taiwan University, Singapore Management University, and the University of Graz. Professor Chang received his BA from Yale University and his JD from the University of Michigan Law School.