The Pan-African Payment and Settlement System (PAPSS), a payment infrastructure provider backed by 15 central banks, is reportedly piloting a currency platform to enable countries to settle trades with local currencies. Known as the Africa Currency Marketplace, the platform is set to be rolled out later this year, a Reuters report said.
According to a report, the planned launch of the African currency platform is expected to help boost intra-Africa trade. The report quotes Mike Ogbalu, the CEO of PAPSS, touting the currency platform as an alternative whose fees are governed by market forces.
“The rates will be market driven, and our system is able to do a matching based on the rates offered by the different participants in our ecosystem,” Ogbalu is quoted as saying.
The piloting and planned launch of the African currencies platform comes amid a push by some African countries to de-dollarize. They argue that using the U.S. dollar, which is often in short supply to consummate transactions, hinders trade. In 2023, Kenyan President William Ruto, who has previously called on African countries to de-dollarize, said the launch of PAPSS negated the need for U.S. dollars when settling transactions.
Despite being widely praised by politicians, some African observers have questioned whether PAPSS can be a viable alternative to the U.S. dollar. Others are wary of this dollar alternative as it may invite the ire of the U.S. President Donald Trump, who has threatened to punish countries plotting to ditch the greenback.
However, despite these doubts about the prospects of PAPSS, Ogbalu insists the payment provider has the capacity to facilitate direct currency swaps.
“Our system will intelligently match them, and party A will get naira in Nigeria and party B will get birr in Ethiopia. The transaction just completes without any third-party currency being involved at all,” the CEO said.”
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