New African Currency Marketplace Launches for Real-Time Cross-Border Payments

Introduction of the African Currency Marketplace

On June 26, the Pan-African Payment and Settlement System (PAPSS) unveiled an innovative solution aimed at facilitating real-time cross-border transactions throughout Africa. This new offering, known as the African Currency Marketplace, allows businesses to conduct transactions directly in local African currencies, eliminating the need to convert through major foreign currencies like the US Dollar or Euro.

Technological Foundation and Oversight

The African Currency Marketplace was introduced during the 2025 Afreximbank Annual Meeting and is powered by the Bantu blockchain network. This platform is designed to handle enterprise-level payments across the continent and is managed by Interstellar, a pan-African infrastructure firm, capable of supporting transactions in up to 42 different currencies.

Addressing Africa’s Payment Challenges

Ernest Mbenkum, CEO of Interstellar, emphasized the potential of blockchain technology to tackle the distinct challenges faced by the continent. By collaborating with various stakeholders, including commercial banks and central banks, the Bantu blockchain was developed to address these issues effectively.

Benefits of Direct Currency Exchange

The African Currency Marketplace aims to facilitate the direct exchange of local currencies, thereby minimizing the costs and delays typically associated with foreign currency conversions. This initiative seeks to mitigate the payment fragmentation that hampers intra-African trade, particularly under the African Continental Free Trade Area (AfCFTA). Additionally, it may pave the way for widespread adoption of stablecoins across the continent.

The Rise of Stablecoins in Africa

Currently, the cNGN stablecoin, which is pegged to the Nigerian Naira, is operational on the Bantu blockchain, with over ₦52 million (approximately $33,800) already minted. Stablecoins, backed by solid collateral reserves, offer a more accessible alternative to traditional fiat currencies. Their inherent flexibility allows for low-cost transactions across the continent.

The Economic Impact of Payment Fragmentation

Africa’s diverse array of 42 national currencies results in a complex network of 861 unique intra-African payment corridors. Unfortunately, many of these corridors are not directly accessible. For instance, a business in Kenya wishing to pay a supplier in Senegal must typically convert its currency to US dollars before exchanging it for West African CFA francs. Each conversion step incurs additional fees, ultimately reducing the amount received by the supplier.

Financial Losses Due to Inefficiencies

This inefficiency is significant, with estimates suggesting that Africa loses around $5 billion annually due to foreign currency dependency and payment leakages. The aviation sector is particularly affected, as airlines often struggle to repatriate earnings from certain countries due to currency restrictions. Recent reports indicate that $1.8 billion in airline funds are currently inaccessible, highlighting the urgent need for improved cross-border payment solutions.

Regulatory Challenges in Cross-Border Payments

The issue of payment fragmentation is compounded by regulatory inconsistencies, as each African nation enforces its own payment regulations, including anti-money laundering (AML) and counter-terrorism financing (CFT) measures. This creates obstacles for seamless cross-border transactions.

Institutional Support for PAPSS

PAPSS, which was established in 2022 by the African Export-Import Bank (Afreximbank), aims to tackle these challenges. Currently, it includes 15 African central banks and 12 payment switches within its network. Since its inception, 56 commercial banks from various countries have joined, with additional banks from Tunisia, Uganda, and Egypt in the integration process.

Future Prospects for blockchain Adoption

The integration of Interstellar’s technology via the Bantu blockchain marks a significant milestone, as it represents the first large-scale adoption of blockchain by African governments. However, while institutional support is growing, the challenge remains to engage consumers and small to medium-sized enterprises (SMEs) in utilizing this intra-African payment solution.

Conclusion

As Africa continues to innovate in the financial technology space, the launch of the African Currency Marketplace signifies a pivotal step towards enhancing cross-border trade and reducing reliance on foreign currencies. The potential for stablecoin adoption and improved liquidity for local currencies could reshape the economic landscape of the continent, fostering greater financial inclusion and efficiency.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research before making any investment decisions.