African continent sees the introduction of a universal online platform for currency exchange aimed at enhancing internal trade through PAPSS.
The Pan-African Payment and Settlement System's (PAPSS) latest venture, the PAPSS African Currency Marketplace (PACM), is set to redefine the continent's financial landscape. This groundbreaking financial market infrastructure aims to address Africa's longstanding currency convertibility challenges, potentially saving the continent an estimated $5 billion annually in fees and delays[1][2].
**Empowering Direct Local Currency Exchange**
PACM facilitates direct local currency exchanges between participating African nations in real-time, ensuring compliance with local financial regulations and banking systems[2]. Built on Interstellar's blockchain-based Stargate platform, the system enables peer-to-peer currency exchange without the need for a third-party intermediary[2][3].
**Efficiency and Inclusion for All**
By allowing smooth, real-time swaps of local currencies directly between individuals and businesses, PACM drastically reduces reliance on foreign currencies (like the US dollar), making cross-border trade more efficient and financially inclusive for Small and Medium-sized Enterprises (SMEs) and informal traders[3].
**A Unified African Financial Market**
PACM acts much like a stock exchange for African currencies, fostering unity in African financial markets and empowering businesses and individuals to trade with their local currency more easily and affordably[5]. This development supports the implementation of the African Continental Free Trade Area (AfCFTA) goals by enabling seamless and cost-effective intra-African payments[4].
**A Step Forward for African Economic Integration**
PACM's openness extends to eligible corporations and financial institutions across Africa, aligning with local regulatory frameworks while creating a single liquidity pool for African currencies[2]. This innovation is recognized as a major step forward for African economic integration and blockchain-enabled financial innovation on the continent[1][2][3][4][5].
First launched in 2022, PAPSS is already facilitating real-time cross-border payments across 17 countries, 14 national switches, and over 150 commercial banks[1]. With the introduction of PACM, Africa is poised to influence global Foreign Exchange (FX) markets in the long term, as institutions outside Africa express growing interest in this potential game-changer[1].
[1] https://www.papss.org/ [2] https://www.interstellar.co/ [3] https://www.reuters.com/business/africa/african-currency-marketplace-pacm-unveiled-by-papss-interstellar-2022-11-11/ [4] https://www.afreximbank.com/ [5] https://www.afcfta.org/
Businesses within African nations can utilize PACM's direct local currency exchange system, built on technology like Interstellar's blockchain-based platform, to reduce reliance on foreign currencies and improve efficiency in cross-border trade. This technology-driven innovation, a part of the Pan-African Payment and Settlement System's ventures, is a significant step forward for African economic integration and financial inclusion, potentially impacting global Foreign Exchange markets in the long term.
