China Narrows Gap with U.S. as Major African and Global Banks Join Yuan Cross-Border Payment System

China has taken a significant step to challenge the dominance of the U.S. dollar in global finance as six major financial institutions, including the African Export-Import Bank, South Africa’s Standard Bank, First Abu Dhabi Bank, Singapore’s United Overseas Bank, Eldik Bank of Kyrgyzstan, and Chongwa (Macau) Financial Asset Exchange, officially became direct participants in the Cross-border Interbank Payment System (CIPS).

The ceremony was held last week in Shanghai, according to the South China Morning Post.

As direct participants, these banks can independently process cross-border yuan transactions without routing payments through intermediaries, unlike indirect participants.

This move advances Beijing’s broader strategy to internationalize the yuan and reduce reliance on the dollar-dominated financial infrastructure.

It also serves as a safeguard against potential U.S. sanctions amid escalating geopolitical tensions between Washington and Beijing that are reshaping global economic alliances.

The expansion of CIPS aligns with similar efforts by Moscow and Tehran to develop alternative payment systems as they seek to circumvent Western financial restrictions and deepen economic cooperation outside the traditional Western-controlled networks.

Launched in 2015 as China’s alternative to the widely used SWIFT system, CIPS has steadily increased its global footprint.

By May 2025, the network counted 174 direct participants, including Chinese banks’ domestic and international branches, alongside major Western financial players such as HSBC, JPMorgan, and Citibank.

The inclusion of these new direct participants reflects China’s growing influence among regions aiming to diversify their financial channels and minimize exposure to Western regulatory pressures and sanctions.

This development marks another strategic stride by China to position itself as a pivotal actor in the emerging multipolar financial order.

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