The Central Bank of Libya and the People's Bank of China have agreed to connect Libyan commercial banks to China's cross-border payment system CIPS, which enables direct settlements in yuan, according to inbusiness.kz, citing Euronews, as reported by infohub.kz.
The connection to CIPS will allow Libyan banks to directly send and receive payments in Chinese currency, reducing the need for intermediary banks and dollar-based infrastructure. It is expected to accelerate international settlements, lower costs, and simplify financial operations for businesses.
CIPS was established by the People's Bank of China in 2015 as an international yuan payment system. Today it is viewed as a key tool for expanding the use of the Chinese currency in global trade and an alternative to traditional international payment channels.
Under the agreement, Libya will also begin making direct money transfers to China and will be able to open letters of credit directly through Chinese banks. According to the parties, this will make trade transactions more transparent and efficient, and ease operations for importers, exporters, and small businesses.
Additionally, the sides agreed to remove existing trade barriers and to soon organize a visit by an official delegation from Libya's banking sector to Beijing. During the trip, commercial bank representatives plan to study China's experience in electronic payments and discuss further financial cooperation.