One of South Africa’s largest banks is eyeing a seat at China’s payments table. Absa is evaluating membership in a yuan-based payments platform that would allow it to settle cross-border transactions directly in Chinese renminbi, a move that could reshape how money flows between Africa and its largest trading partner.
The race for yuan rails in Africa
Absa isn’t operating in a vacuum here. Standard Bank, Africa’s largest lender by assets and a bank in which the Industrial and Commercial Bank of China holds a significant stake, recently became the first African bank to process transactions through China’s Cross-Border Interbank Payment System, known as CIPS. That system went live for Standard Bank’s renminbi settlements in September 2025.
CIPS is China’s answer to SWIFT, the Belgium-based messaging network that underpins most international bank transfers. Beijing built it specifically to promote yuan usage in global commerce, and it has been steadily onboarding participants across Asia, the Middle East, and now Africa.
Absa has already taken steps to deepen its China footprint, including opening a subsidiary in Beijing, so joining a yuan payments platform would be a logical next chapter rather than a dramatic pivot.
Why Africa’s dollar dependency is expensive
Every dollar-intermediated transaction requires correspondent banking relationships, typically with large US or European banks that charge fees for the privilege. It also exposes African importers and exporters to dollar exchange rate risk on both legs of the conversion. A South African company paying a Chinese supplier has to worry about the rand-dollar rate and the dollar-yuan rate simultaneously.
Direct yuan settlement collapses that into a single currency pair. Fewer conversions mean lower costs, faster settlement times, and reduced exposure to dollar volatility.
Chinese banks have been building the other side of this bridge for years. Bank of China and other major Chinese lenders maintain branches across multiple African nations, creating the correspondent banking infrastructure needed to support yuan-denominated flows.
Absa already offers cross-border payment services to its corporate and institutional clients. Adding direct yuan settlement would enhance those existing capabilities rather than require building something from scratch. The bank’s Beijing subsidiary gives it an on-the-ground presence that most African competitors lack.
What this means for investors and the broader market
China has been pushing yuan internationalization through multiple channels: bilateral currency swap agreements, CIPS expansion, and encouraging its trading partners to settle in renminbi rather than dollars.
The risk is execution complexity. Operating in yuan means navigating China’s capital controls, which remain significant despite years of gradual liberalization. The renminbi is not fully convertible, and Chinese regulators can tighten or loosen cross-border flow rules with limited notice.
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