Georgia’s Turn Toward China’s Financial System

Georgia, once Washington’s closest partner in the Caucasus region, is strengthening its economic ties with Beijing. Four Georgian banks have applied to join China’s Cross-Border Interbank Payment System (CIPS), while others may follow suit, Natia Turnava, the head of Georgia’s central bank, announced earlier this month.

Georgian officials cast this as a technical step to boost trade with China, but it reflects a broader geopolitical shift. Under the country’s increasingly authoritarian ruling party, Georgian Dream, Tbilisi has pursued closer ties with Beijing as an alternative to its former strategic partnership with the United States.

Georgian Banks Apply for Membership in China’s CIPS Network

Launched in 2015 as part of an effort to internationalize China’s national currency, CIPS provides clearing and settlement services for cross-border transactions in yuan. The system largely complements the Belgium-based international financial messaging service SWIFT. But CIPS can also enable messaging independent of Western oversight, offering participants a degree of insulation from Western sanctions.

Turnava identified Cartu Bank as one of the four Georgian banks that have applied for direct membership in CIPS, while the other three have not been publicly named. In addition, the Georgian central bank stated in December, following a meeting between Turnava and CIPS’s president, that some Georgian banks already participate in CIPS indirectly via Chinese correspondent banks. Direct participants hold their own accounts and send and receive messages through CIPS, while indirect participants access CIPS through a direct participant.

China’s Growing Footprint in Georgia

The move to join CIPS comes amid a broader expansion of Sino-Georgian economic and political ties. In July 2023, Tbilisi and Beijing signed a strategic partnership agreement calling for expanded cooperation in trade, infrastructure, tourism, and cultural exchanges. In March 2025, the Georgian and Chinese central banks signed a memorandum of understanding aimed at expanding cooperation. Pursuant to that memorandum, the two sides signed an agreement last December allowing the Georgian central bank access to the China Interbank Bond Market (CIBM), with relevant accounts opened in February. Tbilisi plans to invest part of its reserves in yuan-denominated assets as part of a diversification strategy.

China’s interest in Georgia stems from its strategic location between Europe and Asia and its Black Sea ports. The Anaklia deep-sea port is meant to anchor the so-called “Middle Corridor” linking Asian and European markets. After canceling a Western-backed contract to develop the port in 2020, Tbilisi later relaunched the project and selected a consortium led by China Communications Construction Company (CCCC), a firm the Pentagon has identified as a Chinese military company. Chinese firms are also involved in major transport infrastructure in Georgia, including a roughly $1 billion highway project aimed at improving east-west connectivity to the Black Sea.

Georgian Dream leaders see China as a key partner not only for strengthening the country’s economy but also for enhancing authoritarian control. Chinese state-linked firms provide surveillance and security systems used across Georgia, which have reportedly enabled the ruling party’s well-documented suppression of protestors.

U.S. Should Increase Pressure on Georgian Dream

Tbilisi’s growing ties with Beijing should concern U.S. policymakers. Georgia is emerging as a hub for Chinese economic and political influence. Integration into the Chinese financial system could bolster Georgia’s role as a sanctions-evasion hub for Russia and Iran.

Although firmly committed to authoritarian control, regime elites still care about their own pocketbooks and are eager to avoid Western scrutiny. That gives Washington and its allies leverage. The United States and Europe should impose targeted sanctions on senior Georgian Dream figures, security officials, and financiers responsible for the country’s democratic backsliding and drift toward authoritarian adversaries. Western nations should make clear to Tbilisi that the pressure will intensify until Georgia revives its democratic norms, including by holding free and fair parliamentary elections under credible international monitoring.

Keti Korkiya is a research analyst in the Russia Program at the Foundation for Defense of Democracies (FDD). For more analysis from Keti and FDD, please subscribe HERE. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focused on national security and foreign policy.