US Dollar Faces Challenge as Africa Links Directly to China’s Payment System
African Banks Move Away from Dollar
Amid rising concerns over US tariffs and trade threats, several BRICS countries are taking steps to reduce their reliance on the US dollar in international trade.
In late November, just before the 2025 Group of 20 summit in Johannesburg, the governors of the South African and Chinese central banks met to launch a system that could lessen the dollar’s dominance in global transactions.
Standard Bank Connects to China’s CIPS
At the South African Reserve Bank in Pretoria, Standard Bank, Africa’s largest bank by assets, became the first institution on the continent to link directly to China’s Cross-Border Interbank Payment System (CIPS).
This integration allows African companies to make payments to China directly in renminbi, bypassing the US dollar and other intermediary currencies. Officials hope this step will facilitate smoother trade between Africa and China while providing an alternative to the dollar-dominated global financial system.
Implications for Global Trade
Experts say the move reflects broader efforts by BRICS nations to diversify trade settlements and reduce exposure to US-led financial policies. By settling transactions in local or alternative currencies, participating countries can gain more flexibility and reduce reliance on the US dollar as the world’s reserve currency.
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