Absa Group, the Johannesburg-headquartered banking group, is considering integrating China’s Cross-Border Interbank Payment System (CIPS), in the wake of increasing trade between African businesses and China.
The bank would be following in the footsteps of South Africa’s largest lender, Standard Bank, which became the first bank in Africa to offer transactions through CIPS in 2025. In a statement, the bank pointed out that China is Africa’s biggest export market and that a Standard Bank survey had revealed that “34% of surveyed businesses source their imports from China in contrast to 23% of the businesses surveyed in May 2023.”
Beyond the continent, First Abu Dhabi Bank, in the UAE, has been named an official renminbi clearing bank, using the CIPS system. And Iran, increasingly, has reason to trade in yuan.
Go with the flow
For yuan‑denominated transactions, the move brings obvious advantages: single‑currency settlement removes the need to convert via the US dollar, reducing both cost and execution risk, while payments become faster and more efficient.
But the implications extend beyond flows in commodities, services and currencies. Moves like these begin to reshape the infrastructure through which those flows move, raising broader questions about how cross‑border payments are routed, where liquidity is concentrated, and how the global financial system itself is evolving.
Shift from SWIFT?
The shift is not limited to trade with China. We have considered how the risk of sanctions incentives states to increase gold reserves. When crunch time comes, and a nation is excluded from the US dollar system, workarounds need to be found, such as Russia’s reliance on its SPFS payments system as an alternative to SWIFT.
In the words of the Governor of the Bank of Italy, Fabio Panetta, restricting access to SWIFT “demonstrated that payment infrastructures are not merely technical arrangements, but instruments of economic statecraft embedded in the geopolitical landscape”.
In response to this shifting geoeconomic reality, Panetta explained, “new payment arrangements, alternative messaging systems and regional settlement initiatives are emerging – some driven by resilience, others by strategic autonomy.”
Limits and possibilities
This is not to suggest that a payments sea change has already happened or is even imminent. For instance, Brad Setser has persuasively argued that not even China is de-dollarising as rapidly as some assume. And Russia’s deployment of SPFS is not without limitations.
But the trajectory is clear. As the architecture of global payments evolves, so too will the dynamics of FX markets.
As Panetta cautioned, fragmentation could pose a challenge to global development: “a proliferation of parallel systems – weakly connected or politically segmented – would reduce interoperability, increase costs and erode the efficiency gains the G20 Roadmap seeks to deliver.”
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