Ethiopia eyes Yuan debt conversion as China expands global financial influence

Addis Ababa/Beijing — Ethiopia is in talks with China to convert part of its $5.38 billion debt from U.S. dollars to Chinese yuan, marking a significant step in the country’s deepening economic ties with Beijing.

The potential debt conversion underscores Ethiopia’s growing trade and investment relationship with China, as well as a broader global shift toward the use of the yuan (CNY) in international finance.

This move comes as China accelerates efforts to expand the global use of its currency. Across Africa and beyond, major trade deals are increasingly being settled in yuan, reducing dependence on the U.S. dollar. Simultaneously, Beijing continues to promote its digital yuan (e-CNY) and strengthen the Cross-Border Interbank Payment System (CIPS) — a homegrown alternative to the SWIFT network.

Analysts say this trend could have far-reaching consequences. As more nations adopt the yuan for trade and financing, the U.S. dollar’s dominance in global commerce may gradually erode, diminishing Washington’s leverage through sanctions and financial controls.

While digital assets like Bitcoin and meme coins capture public attention, China’s quiet but deliberate monetary strategy may prove far more transformative. Many observers view these developments as the early stages of a monetary realignment — one that could redefine the global financial order and signal the emergence of a multi-currency world.