MANDIRA BAGWANDEEN | How Standard Bank’s CIPS move advances de-dollarisation in Africa

The news that Standard Bank, Africa’s largest lender by assets, had become the first African bank to directly integrate with China’s cross-border interbank payment system (CIPS) in November was far more than a technical backend update.

It signalled a strategic shift in Africa’s financial landscape, challenging the dollar’s long-standing dominance in the region.

When viewed alongside moves by Kenya and Ethiopia to renegotiate debt repayments in renminbi (RMB) and Zambia’s decision to accept China’s currency for mining taxes and royalties, a compelling picture emerges. Practically, Africa is beginning to de-risk from the dollar, signalling a new era of financial multipolarity.

Standard Bank’s integration into CIPS was formalised after it was granted a licence at the Lujiazui Forum in Shanghai in June. The system went live in November, marked by a ceremony at the South African Reserve Bank that was attended by Bank governor Lesetja Kganyago, People’s Bank of China governor Pan Gongsheng, and CIPS chair Wang Hongbo.

Both governors highlighted the importance of the system for future payment transactions between commercial entities in both countries. The presence of high-level central bankers highlighted that this was not merely a commercial product launch; it was a strategic alignment of financial plumbing in the Africa-China trade corridor.

Dollar challenges

For years the trade volumes between Africa and China — the continent’s leading sovereign trading partner — have been bottlenecked by a dollar-centric payment system. Standard Bank’s own trade barometer indicates a notable increase in the proportion of African businesses sourcing imports from China, from 23% in 2023 to 34% in 2024.

But settling these transactions in dollars presents challenges: conversion fees, liquidity shortages and the “correspondent banking” lag that can delay payments by three to five days via Swift, the Euro-American developed financial messaging network that is the main global transaction system for handling international money transfers.

Direct RMB settlement via CIPS allows for near real-time clearing. For Africa’s import-intensive sectors (manufacturing, electronics and construction), shaving days off settlement times significantly improves cash flow.

For Standard Bank, which operates in 21 African countries, this first-mover advantage could position it as the primary facilitator of Africa-China trade, strengthening its market dominance in the Africa-China commercial corridor.

Should Standard Bank’s CIPS integration prove to be useful and beneficial, and alongside a steadily growing Africa-China commercial corridor, other African banks may find commercial incentives to join CIPS to stay competitive and offer their clients more diverse payment options.

To date there has been no official confirmation that other South African banks are interested in joining CIPS. It is likely that other major African and local banks will first want to observe Standard Bank’s experience with CIPS before jumping on the bandwagon.

Should Standard Bank’s CIPS integration prove to be useful and beneficial, and alongside a steadily growing Africa-China commercial corridor, other African banks may find commercial incentives to join CIPS to stay competitive and offer their clients more diverse payment options.

However, the private sector benefit of this move takes on considerable geopolitical importance when compared with emerging sovereign debt trends. In October Kenya converted $3.5bn in loans from China to RMB, and Ethiopia is reportedly in talks with the Chinese to negotiate a similar conversion for part of its China-linked $5.38bn debt.

Moreover, in December 2025 it was reported that Zambia had become the first African country to officially accept the RMB for mining taxes and royalties, marking a significant shift in how the continent’s second-largest copper producer manages its mining revenues.

These conversions primarily serve as a debt management strategy, allowing African countries to save millions of dollars in Chinese-linked debt service costs. By switching to RMB, Kenya, Zambia and Ethiopia benefit from a lower interest rate environment of 3%-4% (China has sought to maintain low interest rates to boost its economy). Specifically, in Kenya’s case shifting to RMB to pay off some of its Chinese debt saves the Kenyan treasury about $215m in annual interest payments.

Do these combined developments — Standard Bank’s CIPS connection and RMB debt conversions in a number of African countries — indicate a decline in the dollar’s dominance in Africa? The quick answer is yes, but it’s a gradual, practical decline, not a sudden collapse.

On the other hand, loans linked to US market rates have become punitively expensive since the US Federal Reserve began hiking interest rates in 2022 to tackle high inflation. By swapping to RMB, African countries can potentially halve their interest payments and align their liabilities with a key trade partner, while at the same time insulating African budgets from the whims of Washington’s monetary policy.

Do these combined developments — Standard Bank’s CIPS connection and RMB debt conversions in a number of African countries — indicate a decline in the dollar’s dominance in Africa? The quick answer is yes, but it’s a gradual, practical decline, not a sudden collapse. The emerging trend is towards currency diversification and a multipolar payment environment, driven by both necessity and geopolitics.

For African countries this is less about challenging Washington and more about derisking their economies. In the case of a dollar surge, which increases debt-servicing costs and worsens foreign-exchange shortages, the RMB provides temporary, tangible relief.

As trade with China surpasses that with the US for many African countries, settling trade and debt in RMB aligns financial flows with commercial realities, creating a self-reinforcing RMB ecosystem. Africa is becoming a key testing ground for China’s long-term goal of internationalising the RMB.

China aims to shift the RMB from being just a currency for trade invoicing to one used for settlement, investment and, ultimately, reserve holdings. Standard Bank’s CIPS integration and African debt conversions are pivotal in this strategy.

CIPS directly increases the volume of global transactions cleared and settled in RMB, in effect expanding its practical use. By converting bilateral debt into RMB, China is moving beyond trade to embed its currency within sovereign financial structures. Debt relief acts as a strategic tool for spreading the RMB, establishing it as a currency for long-term capital and liability management.

On the other hand, Standard Bank’s initiative encourages other African financial institutions to follow suit, further deepening the continent’s integration into China’s financial system and creating a network effect that makes RMB usage more convenient and cost-effective.

Standard Bank’s decision is essentially a strategic move to meet its clients’ commercial needs in an increasingly China-leaning trade environment.

Though the dollar remains the global reserve currency, with unmatched liquidity and depth, the widening use of the RMB is threatening the dollar’s dominant role in Africa-China trade and debt transactions. CIPS integration is a strategic move towards building an alternative, non-dollar financial infrastructure.

This diversification responds directly to the perceived risks posed by US financial sanctions and the desire for a more multipolar global financial system, even if the main motivation remains commercial efficiency.

For Beijing, the African experience illustrates a selective, market-driven internationalisation strategy: leveraging trade and debt relations to build an RMB ecosystem that eliminates the need for dollar-based transactions. This trend is not yet a threat to the dollar’s global dominance, but it is fostering pockets of regional de-dollarisation, especially in the Global South, including the Africa-China trade corridor.

Standard Bank’s decision is essentially a strategic move to meet its clients’ commercial needs in an increasingly China-leaning trade environment. When combined with the RMB-denominated debt restructuring of Kenya and Ethiopia, as well as mining-related payments in Zambia, it highlights a significant financial shift driven by necessity and practicality.

For South Africa and the wider continent, this clearly indicates that the future of finance will be more multipolar, with Africans and Chinese actively forging the connections needed to bypass the costs and volatility of relying on the dollar.

• Bagwandeen, a lecturer at Stellenbosch University, is an affiliated researcher at the New South Institute.