In July 2026, Pan Gongsheng, Governor of the People's Bank of China, and Naji Issa Belkasim, Governor of the Central Bank of Libya, reached an agreement in Beijing: Libyan banks formally joined the Cross-Border Interbank Payment System (CIPS), the renminbi's cross-border settlement network, while Libya was granted access to invest in China's bond market. The two sides also agreed to hold the first Libya–China Banking Forum in early 2027, on the sidelines of the Forum on China–Africa Cooperation (FOCAC).
The news did not grab headlines the way President Trump's threats to bomb Iran's nuclear facilities did, but its long-term significance may run deeper. When an OPEC member — one of North Africa's largest holders of oil reserves — chooses a non-dollar payment system for cross-border settlement, another pivot point appears on the map of global trade settlement.
Why Libya Chose This Moment
Liu Qinghua, a research fellow at the Institute of African Studies of Zhejiang Normal University, breaks down four benefits the move brings to Libya:
First, reducing single-point dependence on the dollar system. Having lived through the 2011 civil war and the early-2026 US military strike against Maduro, Libya's rulers have felt firsthand the "weaponization" risk of the dollar payment system: when a country's assets are frozen by US financial sanctions, its capacity for international trade can be paralyzed overnight. Joining CIPS gives Libya a second payment channel that does not run through SWIFT.
Second, widening the range of destinations for its oil exports. Libya holds Africa's largest proven oil reserves, yet its oil trade has long been settled in dollars, which constrains buyers' room to maneuver. CIPS offers an option for settling oil transactions in renminbi — one especially well suited to trade with China, already the world's largest crude-oil importer.
Third, lowering exchange-rate risk. Crude is priced in dollars, but the dollar itself has swung sharply in recent years; combined with the steady depreciation of Libya's own dinar, a double currency risk is eating into the country's oil revenue. If part of its oil trade is settled directly in renminbi, Libya can use those renminbi to import goods straight from China, sidestepping the cost and risk of dollar conversion.
Fourth, opening new financing channels. With access to China's bond market, Libya can raise renminbi funding — for instance by issuing so-called "panda bonds" — to finance postwar reconstruction and infrastructure. For a Libya where nearly everything awaits rebuilding, this is a realistic, low-threshold option.
Research fellow Liu Qinghua notes: "Libya's entry into CIPS is poised to produce a powerful demonstration effect across Africa and the Arab world, becoming an important node as the global payment system moves toward greater plurality."
The Last Piece of the Oil-Settlement Puzzle
For Beijing, the value of Libya joining CIPS likewise extends well beyond a single agreement. Behind it lies a larger strategic picture: switching oil-trade settlement from dollars to renminbi is not something that happens overnight. It has advanced country by country — from Venezuela to Russia, from Iran to Saudi Arabia. Libya is the latest link in that chain.
China has already pushed CIPS adoption in several oil-exporting countries:
- Russia — after it was cut off from SWIFT, China–Russia oil trade has made heavy use of CIPS
- Iran and Venezuela — under dollar sanctions, both have already turned to renminbi settlement
- Saudi Arabia — in 2024 it said it was "open to settling oil trade in currencies other than the dollar"
- Now Libya joins — covering the three great oil-exporting regions of the Middle East, South America, and Africa
In the first half of 2026, China's imports from and exports to Africa grew 19.6%, while trade with 31 free-trade-agreement partners grew 28.1%. The number of countries enjoying zero-tariff treatment has reached 63. The expansion of CIPS is precisely the financial-infrastructure counterpart to this widening trade map.
Financial De-Dependency and Geopolitical Rebalancing
Libya's choice sends two signals:
On the financial plane — the "unipolar" pattern of global trade settlement is loosening. The duopoly of SWIFT and CHIPS is being breached by alternative systems such as CIPS and Russia's SPFS.
On the geopolitical plane — in North Africa, Libya is the second Arab country, after Egypt, to formally connect to CIPS; Egypt in recent years has itself begun exploring settling part of its trade in renminbi.
Africa's desire to shed dependence on the dollar system is moving from slogans to concrete action. Since 2025, the advance of the African Continental Free Trade Area (AfCFTA), layered atop a series of mutual local-currency settlement agreements signed between countries, has already formed an undercurrent of "de-dollarization." The role CIPS plays here is not to replace SWIFT — it cannot do that yet — but to offer "another option" in key countries and for key categories of trade.
When an OPEC member — one of North Africa's largest holders of oil reserves — chooses the renminbi's cross-border payment system for settlement, the map of global trade settlement is undergoing a fundamental shift. This is not an overnight replacement but a reshaping of the landscape that breaks through one key pivot point at a time. Libya's connection to CIPS may become a demonstration node for financial "de-dollarization" across Africa and the Arab world.