Sudan: A Country with Two Currencies

The News

New Sudanese banknotes have begun circulating in areas controlled by the Rapid Support Forces, bearing the signature of Hussein Yahya Jangoul, “governor” of the parallel central bank in Nyala. On May 11, the unrecognized parallel “Tasis” government issued a decree establishing a “Transitional Currency Council,” effectively institutionalizing a financial split within the country.

Background

Since the outbreak of war in April 2023, Sudan has witnessed an escalating institutional fracture that has gradually extended from the battlefield to every pillar of the state. In late 2024, the central government issued a decision to replace certain currency denominations, which the RSF flatly rejected — creating two parallel monetary systems and deepening the economic divide between the two zones. In 2025, the RSF established the parallel “Tasis” government in areas under its control and began assuming state functions, from paying civil servants’ salaries to managing public services. This trajectory reached a new turning point in May 2026 with the establishment of the Transitional Currency Council and the appointment of a governor for a parallel central bank in Nyala, transferring the instruments of monetary sovereignty from the internationally recognized government to a parallel authority seeking to consolidate its own legitimacy.

Why It Matters to the United States

The emergence of a parallel financial system outside the control of the internationally recognized government raises American concerns about oversight of financial flows and the potential for their exploitation in illicit activities. It also complicates any path toward a unified political settlement backed by Washington, and increases the difficulty of delivering humanitarian aid and rebuilding state institutions.

Domestic Implications

At the internal level, this development entrenches the reality of two near-separate economies within a single state. Flooding the market with large quantities of cash without productive backing fuels inflation and erodes the purchasing power of residents in RSF-controlled areas, while trade and financial transfers between the two zones are disrupted in the absence of any unified pricing mechanism. The liquidity crisis that followed the April 2026 cap on transfer commissions at 15% exposed the fragility of the nascent financial system in RSF areas and its inability to meet citizens’ daily needs. There is also a growing reliance on foreign currencies as an informal substitute, which weakens any party’s ability to assert effective monetary control in the future.

Regional Implications

At the regional level, the circulation of an unrecognized parallel currency is a source of concern for neighboring countries such as Egypt, Ethiopia, and Chad, whose markets could be affected by the cross-border flow of these banknotes in the absence of any oversight. It also opens the door to the weaponization of the financial question in regional power competitions, with outside actors potentially seeking to bolster or undermine the parallel financial system in ways that serve their interests in shaping Sudan’s future. Compounding this is the risk that sustained regulatory vacuum could turn certain border areas into corridors for money laundering and sanctions evasion, threatening the financial stability of the broader Horn of Africa region.

Assessment

What is unfolding in Sudan is not merely a passing monetary crisis — it is a manifestation of the logic of de facto state partition. When an armed faction issues its own currency, establishes a central bank, and pays civil servants’ salaries, it is not managing a crisis; it is building a parallel state using the very instruments of sovereignty. The real danger lies not in the banknotes themselves, but in what they entrench: the longer this financial split persists, the deeper the divide between the two zones’ economies grows, and the more local and regional interests accumulate in preserving the status quo. This is precisely what makes any future political settlement far more complex — it will not merely require political negotiations, but the full reintegration of two divergent monetary, banking, and administrative systems. From the American perspective, this file demands proactive rather than reactive attention: the regulatory vacuum taking shape today in the financial sector of RSF-controlled areas could harden into a structural vulnerability that is difficult to close — whether in terms of money laundering or the ability of sanctioned entities to circumvent international financial measures.