Tripoli: Libya has taken a major step toward strengthening financial cooperation with China by agreeing to connect its commercial banks with China’s cross-border payment system, a move expected to facilitate international transactions and reduce reliance on the US dollar.
According to media reports, the Governor of the Central Bank of Libya, Naji Mohammed Issa, and the Governor of the People’s Bank of China, Pan Gongsheng, reached an agreement to link Libyan commercial banks with China’s Cross-Border Interbank Payment System (CIPS).
The agreement was announced during a meeting between the two central bank officials in Beijing, where they reviewed the volume of trade between Libya and China and discussed measures to expand economic cooperation and increase bilateral trade growth.
In a statement published on its official website, the Central Bank of Libya said the discussions focused on launching a new phase of strategic financial cooperation between the two countries. The integration of Libyan banks with the CIPS network is expected to make cross-border payments more efficient and provide an alternative channel for international financial settlements.
China launched the CIPS system in 2015 through the People’s Bank of China to support global transactions conducted in Chinese yuan. The platform provides infrastructure for processing international payments and is designed to improve the global use of the Chinese currency.
Financial experts say that connecting with alternative payment networks can help countries diversify their financial systems and reduce dependence on traditional dollar-based transaction channels. However, the US dollar remains the dominant currency in global trade and international financial markets.
The agreement comes as several countries continue exploring ways to expand the use of local currencies and alternative payment mechanisms in international trade. China has been promoting the internationalization of the yuan through initiatives aimed at increasing financial connectivity with partner countries.
For Libya, the move represents an effort to enhance banking cooperation with China and improve access to international financial infrastructure. Officials from both countries have described the partnership as part of broader efforts to deepen economic and financial ties.
The long-term impact of Libya’s connection to the CIPS network will depend on the scale of adoption by Libyan banks, the volume of yuan-based transactions, and future developments in global financial cooperation.
