African Currency Marketplace Launches to Reduce Dollar Dependence for Intra-African Trade

The Pan-African Payment and Settlement System (PAPSS) has launched the African Currency Marketplace, a significant step towards reducing reliance on the U.S. dollar for intra-African trade settlements. This initiative, a collaboration between Afreximbank, the African Union Commission, and the AfCFTA Secretariat, aims to streamline cross-border payments using local currencies, marking a crucial move in the continent’s financial integration.

The platform enables transactions to be initiated and concluded entirely in local currencies, eliminating the need for foreign currency conversion. PAPSS CEO Mike Ogbalu stated, “no hard currency is involved” in these settlements. The system operates in real-time, 24/7, ensuring transactions are finalized within minutes. It leverages an integrated network of 16 central banks, over 150 commercial banks, and 14 national switches.

This efficiency is particularly vital for large African companies, such as airlines and industrial groups, which have faced significant challenges in repatriating funds due to exchange restrictions and currency depreciation. Ogbalu highlighted that over $2 billion is currently “trapped” in African countries where airlines operate, underscoring the urgent need for such a solution.

The African Currency Marketplace aims to reduce payment frictions, enhance operational security, and bolster the monetary sovereignty of African states. To achieve this, PAPSS has partnered with Interstellar, the first pan-African blockchain infrastructure provider, founded by Ernest Mbenkum. Interstellar utilizes the Bantu network, a unique African blockchain that supports a comprehensive Know Your Customer (KYC) system and manages up to 43 African currencies.

Since its inception in the West African monetary zone, PAPSS has expanded its network to 16 countries, with plans for continent-wide coverage. The launch of the African Currency Marketplace comes at a crucial time, coinciding with the exponential growth of e-commerce across Africa.

Despite potential geopolitical tensions, PAPSS continues to advance steps that will enable African traders to use their respective local currencies for cross-border transactions. Rather than competing with existing financial players, the African currency marketplace initiative seeks to collaborate with banks, fintechs, and regulators to create a fully integrated African monetary market.

This initiative aligns with broader efforts to harness technology for inclusive economic development. Initiatives like the African Continental Free Trade Area (AfCFTA) and the Pan-African Payment and Settlement System are simplifying cross-border payments and unlocking new market opportunities. These efforts are expected to drive significant growth in Africa's financial services sector.

The platform's success will depend on its ability to navigate regulatory challenges and infrastructure gaps. However, with strong mobile penetration and a growing number of mobile internet users, the potential for fintech to expand its reach and impact is enormous. As Africa continues to embrace digital financial services, PAPSS is set to play a crucial role in shaping the continent's economic future.