African Fiat Currency Exchange Facilitated Through Blockchain Platform by PAPSS
In a groundbreaking move towards economic independence, the Pan-African Payments Settlement System (PAPSS) was officially launched during the annual meeting of Afreximbank. The system, developed by the Africa Export-Import Bank (Afreximbank), is designed to promote free trade among African countries using local currencies.
PAPSS is built on the Bantu blockchain platform, an infrastructure provided by Interstellar, an African blockchain infrastructure provider. This innovative system aims to reduce reliance on the US dollar and euro by enabling cross-border currency swaps and settlements in local African currencies.
The system operates by facilitating local currency settlements through a blockchain-based currency marketplace. Interstellar has developed stablecoin-like digital tokens pegged to local currencies, such as cNGN pegged to the Nigerian Naira, to enable real-time settlements between countries without the need for foreign currency conversions.
The expansion of PAPSS has been significant, with the system now connecting 16 African countries, 15 financial institutions, and 14 national payment switches. This broader adoption of local currency usage for cross-border transactions is expected to lower transaction fees, which are high in Sub-Saharan Africa, often above 8%, and accelerate payment processes, improving working capital and business certainty.
Businesses and individuals can send and receive money seamlessly across African borders using their local currency accounts via digital platforms like OneBank and SterlingPro. This not only simplifies trade but also fosters financial inclusion, a crucial aspect of economic integration.
PAPSS is considered a cornerstone infrastructure for the African Continental Free Trade Area (AfCFTA), contributing to increased intra-African trade by simplifying cross-border payments and reducing currency risk and transaction costs. The system also supports the launch of innovations such as the PAPSSCARD, a Pan-African co-branded card enabling seamless payments and ATM withdrawals across the continent, further integrating African financial systems.
By enabling African companies to move funds across countries without converting to foreign currencies, PAPSS strengthens African financial autonomy and trade flows. This shift towards local currency transactions is expected to position Africa for more self-sufficient growth, enhancing trade, financial inclusion, and economic integration.
The launch of PAPSS marks a significant step towards achieving the vision of a financially integrated Africa, where businesses can thrive and trade flourishes without the burden of high transaction costs and currency conversion risks. With membership of the currency marketplace growing to 19 countries since the start of the year, the future of African trade looks promising.
- The Pan-African Payments Settlement System (PAPSS), launched by Afreximbank and built on the Bantu blockchain platform, aims to strengthen African financial autonomy by enabling cross-border currency swaps and settlements in local African currencies, such as the Nigerian Naira, reducing reliance on the US dollar and euro.
- Businesses and individuals in Africa can now send and receive money across borders seamlessly using their local currency accounts via digital platforms like OneBank and SterlingPro, thanks to the expansion of PAPSS, which has connected 16 African countries, 15 financial institutions, and 14 national payment switches.
- The PAPSS system is expected to lower transaction fees, often above 8% in Sub-Saharan Africa, and accelerate payment processes, positioning Africa for more self-sufficient growth, fostering financial inclusion, and further integrating African financial systems, making intra-African trade simpler and more efficient.
