Larry Johnson: The $25 Trillion Misunderstanding – What CIPS Actually Moves, and Why “2% of SWIFT” Misleads Washington

by Larry Johnson(opens in new tab) [8-25-2026] Larry C. Johnson(bio(opens in new tab)).

Mario Nawfal, based on our discussion today, inspired me to write this article. In the companion to this essay(opens in new tab), I argued that Scott Bessent’s latest sanctions on Iran are toothless because Iran’s oil trade has walked out of the dollar and into the Chinese yuan, settled through a payment system Washington does not control. The standard rejoinder to that argument is a single comforting statistic: China’s cross-border payment network is only about 2 percent of SWIFT, a rounding error, nothing to lose sleep over. That statistic is real, and it is one of the most misleading numbers in the entire debate over American financial power. It measures the wrong thing, and the confidence it inspires in Washington is precisely why the United States keeps being surprised when its sanctions fail to bite.

This piece is about the machinery underneath — what China’s Cross-Border Interbank Payment System actually is, how much money it really moves, and what its trajectory means for the American ability to weaponize the dollar.

The wrong number

Start with what “2 percent of SWIFT” actually describes, because it does not describe CIPS. It describes the renminbi’s share of the payment messages that travel over SWIFT — the yuan’s standing as a currency in global transactions, which has hovered in the low single digits, roughly 3 to 4 percent at its recent peaks and sliding back toward 3. A related figure, the yuan’s roughly 2 percent share of global central-bank reserves, tells the same story about the currency. Both are genuinely small, and both are worth citing when the question is how widely the world holds and invoices in yuan.

But that is a different question from how much money the rail moves. SWIFT is a messaging network — it carries instructions, some 45 million messages a day among 11,000-odd institutions; it does not itself settle anything. CIPS is not a messaging network. It is a real-time clearing and settlement system, the yuan analogue of America’s CHIPS, the pipe through which dollar payments are actually cleared. Comparing CIPS to SWIFT is comparing a settlement system to a telegraph office. And crucially, CIPS can generate its own messaging and clear payments without SWIFT in the loop at all — which is the entire reason it matters to anyone Washington threatens to cut off. When people say “CIPS is 2 percent of SWIFT,” they are quietly substituting the yuan’s currency share for the system’s throughput, and the two are not remotely the same figure.

The real number

Here is the throughput. In 2021, CIPS cleared about 80 trillion yuan, roughly $12.7 trillion. By 2023 it was 123 trillion yuan, about $17 trillion, moving some $67 billion every business day. In 2024 it jumped 43 percent in value to 175.5 trillion yuan — about $24.5 trillion — across 8.2 million transactions, roughly $91 billion a day. In 2025 it reached 180 trillion yuan, about $25.5 trillion, and through the first months of 2026 it was tracking an annualized run-rate near 190 trillion yuan, on the order of $27 trillion. The value moving through CIPS has compounded at close to 60 percent a year since 2016 and has more than tripled since 2020.

Let that scale register. This is a system clearing roughly $25 trillion a year — larger than China’s entire annual economic output — and growing at something like 40 percent annually. It now links 193 direct and more than 1,500 indirect participants across 124 countries, reaching over 5,000 banking institutions in 190 countries and regions. On April 16, 2025, it reportedly cleared about $1.76 trillion in a single day, briefly rivaling SWIFT’s daily throughput. Treat that peak-day, “it-beat-SWIFT” framing with the caution it deserves — it comes from the more excitable corners of the commentary — but the annual figures are published, audited, and not in dispute. Whatever else $25 trillion a year is, it is not a rounding error.

What the rail is for

Scale alone is not the point; the point is what the scale makes possible. CIPS is, functionally, an insurance policy against the dollar — and its clientele is a roster of everyone the United States has tried, or might try, to financially isolate.

Russia is the precedent that should have ended the complacency. When the West cut major Russian banks out of SWIFT in 2022, Moscow did not collapse into autarky; it rerouted onto CIPS and yuan settlement and, by 2023, had become one of the system’s heaviest users. Iran is the current chapter — its oil sales to China clearing in yuan, outside the dollar system Bessent keeps threatening to bar it from. And the Gulf is the tell about where this goes next: Saudi Arabia, the UAE, and Qatar have been joining and expanding their use of the network, increasingly for oil and gas. Every one of these is a state hedging against the possibility that Washington will someday point the dollar at them. The lesson governments drew from watching Russia and Iran is not that the dollar is inescapable. It is that an escape route now exists, and it has room.

The machinery keeps deepening. China has knit bilateral currency-swap lines with dozens of central banks — Argentina, Pakistan, the UAE among them — to seed the yuan liquidity that trade settlement requires. And beyond CIPS sits the next layer: the mBridge project for central-bank digital currencies has already processed around $55 billion, the overwhelming majority in digital yuan, with a UAE-China corridor leading the way — a rail that bypasses not just SWIFT but the entire correspondent-banking architecture the dollar system runs on.

The honest brake

Rigor requires the counterweight, because the story can be inflated into something false — and the excitable end of the internet inflates it daily. CIPS is growing fast, but it is not on the verge of dethroning the dollar, and nothing here says it is.

The dollar’s own clearing system, CHIPS, settles well over a trillion dollars every business day — an order of magnitude more than CIPS moves in the same period. The dollar remains around 57 percent of global reserves and roughly half of all trade invoicing; the yuan, for all the growth of the pipe that carries it, is still that low-single-digit share of global payments. A large portion of CIPS volume is still China-linked trade — money flowing to or from China — rather than pure third-country commerce conducted in yuan because the parties prefer it.

And the real ceiling is not the plumbing but the currency itself. China maintains capital controls and does not allow the yuan to float or move freely, which means a country can settle a trade in renminbi but then struggles to do much with a large yuan balance — it cannot be recycled as frictionlessly as dollars into global markets. That single fact is what keeps the yuan a transactional convenience for sanctioned and hedging states rather than a genuine reserve rival. Until Beijing is willing to give up the control that capital account convertibility would cost it — and there is little sign it is — CIPS will remain a powerful bypass rather than a replacement.

That distinction is the whole of it, and it is worth stating precisely: the dollar is not dying. What is dying is the American monopoly on the plumbing — the assumption that to move serious money across borders, everyone must pass through pipes Washington can close.

The correct way to read CIPS is neither the dismissive “2 percent, ignore it” nor the breathless “the dollar is finished.” It is this: a settlement system that did not meaningfully exist a decade ago now clears some $25 trillion a year, compounds at around 40 percent, reaches 190 countries, and can operate without touching a wire Washington controls. It will not overthrow the dollar. But it does not need to. It only needs to give a determined government — Russia, Iran, and a lengthening line behind them — a working way to move money that American sanctions cannot reach. That is exactly what it now provides, and every fresh round of dollar-weaponization sends more traffic down it. Which returns us to where the companion piece began. Bessent’s sanctions are not toothless because Iran is strong. They are toothless because the rail exists — and the harder Washington leans on the dollar, the more of the world goes looking for the exit it has spent a decade building.