Clearing House Interbank Payment System Definition – The Clearing House Interbank Payment System, commonly referred to as CHIPS, is a privately owned funds transfer system that clears and settles time-sensitive, high-value payments between the world’s major banks. This clearinghouse processes nearly 96% of the dollar-denominated payments moving between countries around the world, including trade-related payments and foreign exchange trades. CHIPS, which is operated by the Clearing House Payments Co. LLC in New York City, has operated since 2001 as a real-time clearing and settlement system. Together with the Fedwire Funds Service, which is operated by the Federal Reserve Banks, CHIPS forms the primary U.S. network for large-value domestic and international “USD” payments. Only the largest banks dealing in U.S. dollars participate in CHIPS. About 70% of these are non-U.S. banks. Smaller banks have not found it cost effective to a direct member of CHIPS, but many have accounts at CHIPS-participating banks to send and receive payments.
Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.