NBG: China’s CIPS System Not a Replacement for SWIFT

The meeting focused on cooperation opportunities, particularly emphasising investment projects in road, railway, and transit transportation.“The importance of current and upcoming projects, including the construction of the East-West Expressway and the transit potential of the Middle Corridor, was highlighted during the discussions,” the Finance Ministry stated.Ekaterine Guntsadze, Deputy Finance Minister and Rolande Pryce, World Bank Regional Director for the South Caucasus, attended the meeting.

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“In some cases, recent dynamics represent a sharp reversal of historical trends,” the report states.Key Findings on the Current Account: Rapid growth in ICT and business service exports is reshaping the services export structure, complementing modest growth in tourism revenues. The current account deficit, excluding reinvestments, remains well below historical norms. Despite a sharp deterioration in Q1, recent indicators suggest an improvement in Q2, driven by a stronger performance in goods trade and remittances. In Q1 2025, the seasonally adjusted current account deficit rose to 6.7% of GDP, up from 5.1% the previous quarter. The increase was driven by a decline in foreign wages, a widened trade deficit, and lower remittances. However, the ICT sector’s rising exports partially offset these effects by expanding the surplus in services.Recent data indicate a positive trend reversal in Q2: According to Geostat, the foreign trade deficit in goods fell 10.5% year-over-year (compared to a 16.2% rise in Q1). National Bank of Georgia (NBG) data show remittances rose by 10%, reversing a 3.2% drop in Q1. Key Findings on the Financial Account: Foreign direct investment (FDI), excluding reinvested earnings, remains weak. Reinvested profits continue to dominate FDI inflows, accounting for 67% of net direct investments in Q1. Portfolio investment activity is rising, with Georgian residents increasingly purchasing foreign debt securities—a notable shift from past behavior. Public and private sector borrowing continues to be a key source of current account financing, though loan volumes only slightly increased in Q1. Foreign exchange reserves played a major role in deficit financing during Q1, but this trend reversed in Q2, as the NBG resumed aggressive USD purchases amid favorable lari conditions. Between March and May, the central bank purchased $613 million, with further interventions continuing into June and July. Overall, while Georgia’s external balance faced challenges in early 2025, TBC Capital notes signs of stabilization in the second quarter, supported by stronger exports, recovering remittances, and prudent central bank actions.

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The total number of shares cancelled since the launch of the Buyback Programme in August 2024 is 963,407.As announced by the Company on 10 July 2025, the Buyback Programme completed on 10 July 2025 and all the treasury shares purchased in the Buyback Programme have now been cancelled. Number of shares canceled 47,950, total voting rights after cancellation amounted to 43,863,576.

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The meeting was held as part of ongoing discussions stemming from a memorandum of understanding signed with the People's Bank of China in March. The talks focused on expanding collaboration between Georgia's National Bank and CIPS, particularly around providing Georgian financial institutions with better access to CIPS's global payment network.Natia Turnava emphasized that Georgia's payment and settlement systems are continuously evolving, and partnership with CIPS would streamline payments, transfers and transactions between the two nations while bolstering Georgia's position in the Middle Corridor."This is the first time Georgia has hosted a delegation from the Cross-Border Interbank Payment System,” Turnava noted. "A key component of our comprehensive memorandum with the People's Bank of China focuses on streamlining transactions between our respective financial systems and enhancing accessibility. This initiative will strengthen our bilateral trade relationship which is already significant. Additionally, simplifying payment systems between our two countries will naturally serve to reinforce Georgia's strategic position in the Middle Corridor."CIPS President Fu Huang highlighted how the growing ties between Georgia and China are already driving increased cross-border payment volumes. He noted that integrating advanced payment systems like CIPS would significantly strengthen economic cooperation between the countries."China is one of Georgia's most important trading partners," Fu Huang stated. "Establishing well-developed, efficient, and secure payment infrastructure will be extremely valuable for deepening these relationships." During the visit, CIPS leadership also met with representatives from Georgian commercial banks, offering them the opportunity to join the global payment network. Both sides agreed to continue developing this cooperation.The Cross-Border Interbank Payment System is an authorized payment platform established by the People's Bank of China in 2015, specializing in yuan-denominated cross-border payment clearing. Since its launch, CIPS has built an extensive network of direct and indirect participants across nearly all major global regions. The system currently serves more than 4,700 banking institutions from 185 countries worldwide. In 2024, CIPS processed transactions worth over 570 trillion yuan.

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This partnership will significantly streamline international USD transfers and payments for Basisbank customers worldwide. The collaboration between this major American financial services company and the Georgian banking system underscores growing international interest in Georgia's financial sector and builds confidence to further strengthen international payment channels while improving transaction efficiency.The Bank of New York Mellon Corporation is one of the world's largest providers of global financial services, headquartered in New York. BNY operates one of the most extensive correspondent banking networks globally, specializing in asset management and custody services across more than 100 markets worldwide. With over 240 years of client service experience, BNY brings extensive expertise in asset management and investment operations to the global marketplace.

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Total remittances for the first half of 2025 amounted to $1.715 billion, according to central bank data.The European Union maintained its position as the largest source of remittances, accounting for 44.4% of total flows with $140.2 million—representing a robust 17.3% annual growth rate. Within the EU bloc, Italy, Germany, and Greece emerged as the top contributors to Georgia’s remittance inflows.Transfers from the United States jumped 23% year-on-year in June, reaching $58.7 million. This contrasts sharply with flows from Russia, which declined 15.9% annually to $41.1 million, continuing a downward trend.Outbound transfers from Georgia also increased, with $34.3 million ($93.6 million lari) sent abroad in June 2025—a 21.8% rise from the $28.1 million recorded in June 2024.

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The foundations of this cooperation were laid in 2024 during the Asian Development Bank (ADB) Annual Meeting, where NBG Governor Natia Turnava met with the Governor of the Bank of Korea. During that visit, a Memorandum of Understanding was also signed between the NBG and the Korea Financial Telecommunications and Clearings Institute (KFTC), reinforcing bilateral commitment to closer cooperation.As part of this deepening partnership, the initial phase of the project will focus on launching a targeted initiative to support cashless settlements in Georgia. To mark the occasion, a delegation from the Bank of Korea and KFTC arrived in Georgia to begin the joint work.At the outset of the visit, a cooperation agreement was signed between the National Bank of Georgia and the Bank of Korea, formally confirming their partnership in the project. The document was signed on behalf of the NBG by Vice Governor Ekaterine Galdava.As Vice Governor Galdava noted, the development of cashless payments is of strategic importance for Georgia, particularly at a time when the country is actively modernizing its Real-Time Gross Settlement (RTGS) system and preparing to launch instant payment solutions. In this context, collaboration with leading central banks in the region is crucial.Importantly, Georgia is the first non-Asian country with which the Bank of Korea and KFTC have partnered on the development of cashless payment systems.The project builds on the Bank of Korea’s successful experience in payment system modernization and international best practices. Key objectives include supporting technological innovation, analyzing consumer behavior and infrastructure-related challenges, and promoting financial inclusion, particularly in regions.During the visit, the Korean delegation is expected to meet with representatives from banking and fintech associations, commercial banks, payment service providers, and fintech companies.In subsequent phases, the project will involve in-depth assessments and evaluations, based on which concrete policy, regulatory, and technological recommendations will be developed to support the future evolution of Georgia’s payments landscape.This partnership is expected to make a significant contribution to the development of Georgia’s payment infrastructure, enhance access to financial services, strengthen transparency, and promote the efficient functioning of the broader payment ecosystem.

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As of June (01.06.2025), the volume is up to 510 million GEL in total (01.06.2023- 408 million).

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