China's CIPS gains ground in Africa as Libya joins yuan payment network
Libya's banks are adopting China's Swift alternative to bypass dollar sanctions.
Libya has become the latest African nation to integrate with China's Cross-Border Interbank Payment System (CIPS), a direct rival to the Swift international payment network. After talks between Central Bank of Libya Governor Naji Issa and People's Bank of China Governor Pan Gongsheng, Libyan banks will join CIPS to facilitate direct yuan interbank payments for trade. According to the state-run Libyan News Agency, the move will streamline commercial transactions, accelerate cross-border transfers, and boost trade flows. Libya is also planning to issue panda bonds—yuan-denominated debt sold in mainland China—to help fund reconstruction after years of conflict.
Libya joins a growing list of African lenders already on CIPS, including the African Export-Import Bank and South Africa's Standard Bank, the continent's largest. Earlier this year, Zambia began collecting taxes and royalties from Chinese mining firms in yuan, channeling the currency back to Beijing to fund imports and service loans. These developments signal a broader shift as Beijing pushes to internationalize the yuan and reduce African reliance on the US dollar. For African nations, CIPS offers a way to bypass potential sanctions and lower transaction costs, while deepening trade ties with China, which remains the continent's largest trading partner.
- Libya's banks are joining China's CIPS payment system after talks with the People's Bank of China, enabling direct yuan interbank payments.
- Libya plans to issue panda bonds (yuan-denominated debt) to finance post-conflict reconstruction.
- Zambia, African Export-Import Bank, and Standard Bank are already using yuan or CIPS, accelerating Africa's de-dollarization trend.
Why It Matters
CIPS adoption gives African nations a Swift alternative, lowering dollar dependency and reshaping cross-border trade finance.