CHIPS

CHIPS is where most of the world’s dollar payments actually settle. Operated by The Clearing House and owned by its participant banks, the Clearing House Interbank Payments System settled an average of $2.014 trillion per business day in 2025, and its participant list reads as a roster of global dollar clearing: the large US banks plus the US branches of the major international ones. When a payment from Singapore to São Paulo settles in dollars through New York correspondent banking relationships, CHIPS is very often the system doing the settling.

Its design choice is the interesting one. Where Fedwire settles every payment individually, CHIPS runs a continuous liquidity-saving algorithm: payments wait in a central queue, and the system searches for offsetting flows to release together, bilaterally or multilaterally netted. Banks pre-fund a position at the start of the day, and the algorithm recycles that liquidity all day long. In 2025 the network measured its liquidity efficiency at 26:1, settling roughly $2 trillion daily on about $96 billion of funding. The Clearing House estimates a pure gross settlement design would need more than four times that funding for the same flows.

Netting without the overnight wait

CHIPS is often filed under deferred net settlement, but the deferral is measured in minutes, not hours: payments release throughout the day as offsets are found, with finality at release, and any residual positions settle over Fedwire at day’s end. It is a demonstration that netting and finality are not opposites; the queue is the price, since a payment with no offsetting flow waits longer than it would on a gross system.

Reach

CHIPS settles only US dollars between its New York participants, so its global importance is indirect: it is the dollar hub that cross-border chains route through, not a cross-border network itself.