Mongolia is rapidly adopting China’s Cross-Border Interbank Payment System (CIPS) as its preferred platform for yuan-denominated transactions, reflecting the growing financial integration between the two neighbors. Golomt Bank, Mongolia’s second-largest lender, began using CIPS in September 2025 and has since seen 96% of its yuan payments shift from the traditional Society for Worldwide Interbank Financial Telecommunication (Swift) network to CIPS within six months.
The switch to CIPS has significantly reduced settlement times from one or two days to near real-time processing, while lowering transaction costs for importers and small businesses engaged in trade with China. Previously, these transactions were routed through correspondent banks, but Golomt’s direct participation in CIPS has streamlined the process. “It’s quite affordable and saves time for our customers who do cross-border business,” said Amarzaya Odontaibar, Golomt’s chief executive.
CIPS, initially established by the People’s Bank of China in 2015 to facilitate yuan settlements, has gained strategic importance amid Beijing’s push to develop an alternative financial infrastructure to the Western-dominated Swift system. This effort intensified after sanctions on Russia raised concerns about overreliance on existing international payment networks.
Odontaibar anticipates that Golomt’s early adoption will encourage Mongolia’s broader banking sector to join CIPS. “I’m pretty sure within one or two years almost all the big banks will be joining CIPS,” he stated, forecasting rapid growth in yuan transactions through the system.
The shift underscores China’s expanding financial influence in Mongolia, where approximately 95% of commodity exports go to China, which also supplies a significant portion of consumer goods. Faster, cheaper yuan settlement mechanisms are increasingly appealing to Mongolian banks and businesses as a result.
At the same time, Hong Kong is emerging as an important hub for Mongolia’s international capital access. Banks based in Hong Kong have been expanding their presence and clientele in Mongolia, leveraging the city’s role as a gateway to global markets. Golomt, whose international bonds have been listed on the Luxembourg Stock Exchange since 2025, is considering a London listing to further tap into European and US investor bases. Odontaibar described Hong Kong as “an easy route” for Mongolian mining firms seeking fundraising, given China’s dominance in the country’s commodity trade.
Mongolian banks, including Golomt, are actively pursuing overseas expansions and international public offerings to enhance visibility and governance standards. Golomt is also exploring issuing panda bonds in China’s domestic market to diversify its funding sources. However, Odontaibar noted that high foreign exchange hedging costs remain a significant challenge, as yuan proceeds must be swapped into Mongolia’s tugrik before domestic lending.
Beyond payments and financing, Golomt is accelerating investment in artificial intelligence (AI). The bank allocates between 60 and 85% of its annual capital expenditure to technology development and plans to engage with Hong Kong-based AI and consumer scoring firms later this year. Golomt is also the principal sponsor of Mongolia’s National AI Campaign, a five-year initiative aiming to train 2,500 teachers in AI skills by 2030.