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Libya connects its banks to China's yuan payment network

Libya connects its banks to China's yuan payment network

Money Moves

The Central Bank of Libya joins CIPS, the latest oil exporter to build a payment channel that sits outside the US dollar

Yesterday: Libya joins CIPS in Beijing

Overview

For years, a Libyan bank paying a Chinese supplier had to send the money through a US dollar bank first. This week, Libya's central bank agreed to skip that step.

The Central Bank of Libya will link its commercial banks to CIPS, China's yuan payment network. Libya joins a growing group of oil exporters building channels that route around the dollar and the American banks that clear it.

Why it matters

Every barrel of oil sold outside the dollar weakens the system that lets US sanctions reach almost any bank on earth.

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Key Indicators

117
Countries reachable via CIPS
China's payment network now links participants across 117 countries.
$25T
CIPS transaction volume in 2025
The network handled about 180 trillion yuan in payments last year.
57%
Dollar share of global reserves
The dollar's share of central bank reserves fell below 57% in 2026, its lowest since 1995.
2027
First Libyan-Chinese banking forum
The two central banks plan an inaugural forum in early 2027, alongside the China-Africa Forum.

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People Involved

Organizations Involved

Timeline

October 2015 July 2026

4 events Latest: Yesterday
Tap a bar to jump to that date
  1. Libya joins CIPS in Beijing

    Latest Agreement

    Issa and Pan finalize CIPS access, agree to open China's bond market to Libyan investment, and plan a first Libyan-Chinese banking forum for early 2027.

  2. Libya and China agree to link banks

    Agreement

    Meeting on the sidelines of the IMF Spring Meetings in Washington, Issa and Pan announce a plan to connect Libyan banks to CIPS.

  3. CIPS volumes hit records after US strikes on Iran

    Market

    Daily payment volumes on CIPS spiked as banks in the Middle East and Africa sought routes outside the dollar system.

  4. China launches CIPS

    Infrastructure

    The People's Bank of China opens a network that lets banks settle payments in yuan without a dollar intermediary.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

1974

The petrodollar system takes shape (1974)

After the 1973 oil shock, the United States and Saudi Arabia reached an understanding that Saudi oil would be priced and sold in dollars. Other producers followed. This tied global oil trade to the dollar and pushed exporters to hold dollar reserves.

Then

Oil buyers everywhere needed dollars, which lifted demand for the currency and for US assets.

Now

For fifty years, pricing oil in dollars helped keep the dollar at the center of world trade and gave US sanctions long reach.

Why this matters now

Libya's move is a small chip at that arrangement: an oil exporter setting up a way to trade without the dollar in the middle.

February–March 2022

Russia cut off from SWIFT (2022)

After Russia invaded Ukraine, the US and European allies removed major Russian banks from SWIFT, the main messaging system for cross-border payments. Russia leaned harder on China's CIPS and on yuan settlement to keep trade moving.

Then

Russian trade partly rerouted through yuan channels, though at higher cost and with fewer counterparties.

Now

The episode showed other governments how exposed dollar and SWIFT access can be, and it drew fresh interest in CIPS.

Why this matters now

It is the clearest recent example of why an oil state might want a payment route that Washington cannot switch off.

2023–2026

Saudi Arabia expands yuan oil sales (2023–2026)

Saudi Arabia, the largest oil exporter, moved a rising share of its sales to China into yuan pricing. By 2026 that share had climbed from about 15% to 22%, and similar shifts spread across the Middle East and Africa.

Then

More oil trade settled in yuan, feeding record volumes through CIPS.

Now

The pattern gave smaller exporters a template and made yuan settlement look routine rather than experimental.

Why this matters now

Libya is following a path a much bigger producer already opened, which is why its move fits a trend rather than standing alone.

Sources

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