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Chinese company IZP Technologies Group (IZP) and the Bank of Lithuania (BOL) signed a contract on June 22 to build a new credit card association.
The contract outlined how the Globebill, a subsidiary of IZP, could acquire rights to build a credit card association in Lithuania. IZP and BOL will work together to introduce Globebill as a EUR-RMB card association, and develop it further in Europe based on Lithuania's results.
The Chinese State Council recently released guidelines for facilitating healthy and rapid development of international e-commerce, laying a foundation for the project between China and Lithuania.
The contract's main points include: introducing a dual-currency (EUR-RMB) credit card association in Lithuania and expanding it Europe-wide; founding an automated clearing house for the card association clearing function; establishing a Lithuanian legal entity and acquiring an electronic money institution license for issuing IBANs and other payment operations; participating in the euro retail (SEPA-MMS) and RTGS (TARGET2-LIETUVOS BANKAS) payment system; and establishing a platform in Lithuania that integrates with banks in Lithuania to further promote trade.
The platform will connect local banks and banks in other European countries, eventually becoming the unified platform for the trade transactions between China and Europe. IZP will also issue credit cards to businesses and individual clients in Lithuania and other European countries.
"Lithuania is a member of EU. The 'Silk Road Station' plan of IZP is based on the concept 'Finance Goes in Advance'. The first thing we've done is to integrate with Bank of Lithuania, therefore allowing us to connect with the clearing system of the whole Euro zone," said Luo Feng.
The "Silk Road Station" is related to the Belt and Road Initiative, and the RMB based clearing and settlement system is indispensable in its implementation, he added.
"Previously, the exchange from EUR to RMB had to go from EUR-USD-RMB, but now we can make the exchange step from EUR to RMB directly. The simplification of these steps will reduce the time and cost for enterprise trading," said Luo.
By carrying out financial operations along the Belt and Road Initiative area, IZP plans to slowly establish a global RMB clearing system and increase international use of RMB.
Located on the Baltic coast, adjacent to Russia, Latvia, Belarus and Poland, Lithuania is well-suited for land and sea transport. It is an important country in the area that Belt and Road Initiative covers and can be used as a market portal through which Chinese enterprises enter Europe.
"IZP Technologies Group is interested in working with us in the field of e-payments, and the Bank of Lithuania is willing to provide financial infrastructure so that the region's trade with China will be more convenient," said Mr Jurgilas, the member of board of Bank of Lithuania.
"It's necessary to develop local payment and clearing systems as Europe-China trade gets deeper and deeper," Jurgilas said.
