It’s a sovereignty issue…

When I questioned whether the Pan-African Payment and Settlement Systems (PAPSS) could survive the looming digital currency wars, I had no idea that it would roar back with a double-barreled announcement. The intra-African payment initiative on June 26 launched a new product to facilitate real-time cross-border settlements across Africa. Dubbed the African Currency Marketplace, it will facilitate settlement of transactions directly in African currencies without routing them through the dollar, Euro, or other foreign currencies.

The Afreximbank and AfCFTA secretariat initiative utilizes the network of 16 central banks, over 150 commercial banks, and 14 national switches to facilitate exchanges entirely in local currencies and in real-time, 24/7. This is an attempt at addressing payment fragmentation that still impedes intra-African trade under the African continental Free Trade Area (AfCFTA). This is an additional signal that it could support massive stable coin adoption across Africa. However, this raises a critical question on where Africa is finally ready to bet on itself at scale.

A New System that Matters

Once a mere idea of speeding up intra-African transactions, PAPSS has now entered the next phase of real-time fiat currency exchange platform that doesn’t just clear payments across borders but also facilitates direct settlement in local African currencies. Sub-Saharan Africa is still the most expensive region to send money to with transfers costing an average of 8.45% fees as at 2024. This can equally rise to as much as 20% in some countries which signifies the need to get rid of bottlenecks around remittances for African trade to grow.

The new development, executed in collaboration with Interstellar, was simulated through local fiat-pegged stable coins such as Nigeria’s cNGN to allow for the settlement of local currencies. This has resulted in a truly peer-to-peer system using prefunded settlement accounts opened by commercial banks and reconciled at the end of each day. The system is built on Interstellar’s Bantu Blockchain.

The implication of the new system is that a Tanzanian exporter will no longer rely on USD to transact with a Togolese importer. There is an African network now, backed by central banks and monetary authorities, that will shoulder the burden of conversion, slippage, and time delays that was previously handled by commercial banks abroad. With success in more stablecoins adoption, Africa can expect improved liquidity and accessibility even for less commonly used currencies across the continent.

Finally, A system that is Listening

Initially, I questioned whether the PAPSS system could remain relevant in a rapidly digitizing world, especially with rising Bitcoin adoption, China’s CBDC diplomacy, and Western sanctions reshaping global trade rails. My worry wasn’t that PAPSS was misguided by rather that it might move too slowly to matter.

“Yet, although institutions are increasing buying into it, the top-down approach of the system still struggles to have an impact on Africans at the grassroots level.”

Africa operates 42 national currencies that create a web of 861 unique intra-African payment corridors each with a direct currency pair through which cross-border payments can flow, and are not direct accessible in practice. Consequently, each country enforces its own rules for payments, anti-money laundering, and counter-terrorism financing checks which makes cross-border payments difficult. There is also an element of persistent fraud and mistrust in the banking and payments sector liming the adoption of solutions such as license passporting.

However, the latest developments show a system that listens. Afreximbank and the AfCFTA secretariat, to their credit, seem to understand the tempo of today’s financial revolutions: fast, experimental, and regionalized. PAPSS is on a path to becoming what most hopped for, a sovereign Pan-African alternative to the SWIFT ecosystem that is tailored to local peculiar challenges around currency volatility, dollar scarcity, and cross-border banking bureaucracies.

The African Currency Marketplace is thus aimed at reducing payment frictions, enhancing operational security, and bolstering monetary sovereignty of African states. It further establishes a framework for collaboration with banks, Fintechs, and regulators across the continent to create a fully integrated African money market. For instance, companies such as Continental RE, Zep RE, and Kenya Airways have been using the currency marketplace to move funds across African nations.

Reclaiming Agency Over Her Own Money

Africa still trades more with the rest of the world than itself. This has been reflected in a rate of 15% intra-African trade compared to Europe’s 70% and 60% for Asia. These imbalances largely stem from payment frictions and the high cost of currency conversions. With PAPSS now actively removing the U.S. dollar from the equation, Africa can start to reclaim agency over its own money. This is not anti-dollar for the sake of protest. It’s about efficiency. It’s about cutting costs, gaining speed, and unlocking the kind of micro and SME-level trade that a dollar-denominated world simply excludes.

L–R: Kwame Oppong, Director of Fintech and Innovation, Bank of Ghana, (and panel moderator), Ernest Mbenkum, Interstellar CEO, and Mike Ogbalu, PAPSS CEO at the 2025 Annual Meeting by Afreximbank/Image Source: Interstellar

Further, as global geopolitics continue to polarize around currency blocs where BRICS+ is building own payment systems, U.S sanctions becoming more aggressive, and CBDCs tied to national interests, Africa needs is own payment infrastructure to thrive and survive. African financial institutions cannot afford the inconvenience of first seeking approval from each market as it slows the rollout of solutions and limits liquidity for less-traded currencies leading to underdeveloped payment corridors.

But It Still Posses the Questions…

While it is worth celebrating the progress being made with the PAPSS system and solving a concern at a time, there still pending questions for it to keep up with the rest of the world.

The Interstellar technology marks the first time African governments will adopt a blockchain technology on a multinational scale which is promising. Yet, although institutions are increasing buying into it, the top-down approach of the system still struggles to have an impact on Africans at the grassroots level. One can only hope that broader adoption by consumers and SMEs will form the next frontier for the initiative. Moreover, PAPSS still needs widespread political and private sector buy-in to be truly transformative.

Secondly, the interoperability of newer decentralized platforms ought to be aggressively integrated into the framework, including the now used Stablecoins and bitcoin among other decentralized tools gaining traction among remittance corridors, freelancers, and informal sector traders. For the framework to stay relevant, it will have to cater to the digital-native African.

Thirdly, there is question on whether it can scale fast enough owing to the growing needs and global trends. Financial infrastructure is only as strong as the trust and consistency behind it highlighting the need for mechanisms to ensure integration of PAPSS by the 54 nations. Underscored in this are also questions on whether banks will cooperate or resist due to vested interests and the safeguards against exit to prevent capital flight and manipulation.

And finally, what about the people? Where is the communication strategy to make PAPSS a household name—not just for policymakers, but for boda boda riders, market traders, and digital nomads alike? If PAPSS is to outlive its institutional parents and stand toe-to-toe with the giants of global finance, it must scale fast, integrate broadly, and communicate boldly.

These are the writer’s own opinions and do not necessarily reflect the viewpoints of Liberty Sparks. Do you want to publish in this space? Contact our editors at [email protected] for further clarification.