China’s payment system spreads across Africa and Asia amid US trade war

China’s cross-border yuan payment system has signed up more financial entities from Africa, Central Asia and the Middle East, as Beijing accelerates efforts to promote the global use of its currency amid rising tensions with the United States.

A group of six financial institutions officially joined the yuan-based Cross-border Interbank Payment System (CIPS) as direct participants during a ceremony in Shanghai on Wednesday, becoming the latest entities to sign up to China’s alternative to the Society for Worldwide Interbank Financial Telecommunication (Swift) system.

The newcomers include the African Export-Import Bank, First Abu Dhabi Bank, South Africa’s Standard Bank, Singapore’s United Overseas Bank, the Kyrgyzstan-based Eldik Bank, and Chongwa (Macau) Financial Asset Exchange, a state-owned asset trading platform from the special administrative region, according to state broadcaster CCTV.

The system had 174 direct participants as of the end of May, though most of them were made up of domestic and overseas branches of Chinese banks, as well as Chinese branches of global financial giants such as HSBC, JP Morgan and Citibank.

A direct participant refers to an entity that owns a CIPS account and can directly remit through the system, while indirect participants have to rely on others to complete transactions on their behalf.