Yuan payments system makes inroads in Africa

China has added two African financial institutions to its Cross-border Interbank Payment System (CIPS) as it steps up efforts to internationalise the yuan and reduce reliance on Western financial infrastructure. The African Export-Import Bank and Johannesburg-based Standard Bank have recently joined as direct participants of CIPS, a Beijing-backed alternative to the Swift international payments network. 

Launched in 2015, CIPS enables Chinese and foreign banks to clear and settle cross-border payments in yuan. It acts as an intermediary in international transactions, verifying and processing payments between financial institutions. As of May 2025, CIPS had 174 direct participants, though the majority are domestic or overseas branches of Chinese banks, along with local branches of international banks such as HSBC, JPMorgan, and Citibank. Transactions processed through CIPS reached 175tr yuan (US$24.4tr) in 2024, marking a 43% increase compared with the previous year. 

The system is a key part of China’s strategy to promote the use of the yuan in global trade and to insulate its financial system from potential adverse Western actions. In 2022, for instance, several Russian banks were banned from the Swift network following the country’s invasion of Ukraine. Swift, based in Belgium, is overseen by the central banks of the G10 countries. 

One of the system’s biggest advantages is transaction speed. Payments through CIPS can be cleared within seconds, a dramatic contrast to the three to five days typically required for Swift transfers. In a pilot earlier this year, a payment between Hong Kong and Abu Dhabi settled in just seven seconds, with a 98% reduction in fees. 

In contrast, Swift is not a settlement platform, but rather a secure messaging network that transmits payment instructions between institutions. Its primary advantage lies in handling transfers in multiple currencies, including USD, EUR, GBP, and JPY. Yet for markets with strong China ties or high yuan trade exposure—Africa among them—CIPS’s real-time clearing capacity offers a compelling alternative.

The CIPS expansion also has broader implications for Africa-China trade, especially at a time when Western banks are reducing their presence in Africa and donor programmes are being scaled back. By providing direct access to a fast, yuan-based payments system, CIPS helps lower transaction costs, reduce dependency on correspondent banking channels, and improve financial accessibility across the continent. 

This matters especially in sub-Saharan Africa, which remains the most expensive region globally for sending and receiving money, with remittance costs averaging around 8.5%. The efficiency gains CIPS offers could prove crucial for banks and businesses operating across borders and margin-sensitive industries. 

Standard Bank, which has a presence in 20 African countries, said its access to CIPS would facilitate direct interbank payments between Africa and China in yuan. The ability to process transactions in a single currency removes the need for intermediaries and currency conversions, potentially reducing settlement times and transaction costs. This is expected to improve the overall efficiency of trade between the two regions. 

Standard Bank’s latest Africa Trade Barometer report, which surveyed businesses in 10 African countries, shows that 34% of importers source goods from China, up from 23% of those surveyed a year earlier. China has been Africa’s largest trading partner for 15 consecutive years. Bilateral trade reached US$296bn in 2024, driven largely by Chinese exports to the continent, which were valued at US$179bn. Africa’s main imports from China include manufactured goods, electronics and machinery, while its exports to China are largely made up of metals, mineral products, and fuel. 

 
References 

'Chinese investors make Ukraine war bets on oil, payment firms', Reuters, 28 February 2022 

'What is China's onshore yuan clearing and settlement system CIPS?', Reuters, 28 February 2022 

'Standard Bank is South Africa’s most valuable banking brand for a fourth consecutive year', Standard Bank, 07 March 2025 

'China’s payment system spreads across Africa and Asia amid US trade war', South China Morning Post, 19 June 2025 

'Standard Bank first African bank to offer access to China’s Cross-Border Interbank Payment system', Standard Bank, 19 June 2025 

‘China is trying to win over Africa in the global trade war’, The Economist, 19 June 2025 

'Africa Trade Barometer', Standard Bank, Accessed on 24 June 2025 

'A few observations on global financial governance – keynote speech by PBOC Governor Pan Gongsheng at the 2025 Lujiazui Forum', The People's Bank of China, Accessed on 24 June 2025 

'Can china's CIPS rival swift in africa?', African Banker, Accessed on 26 June 2025