The adoption of blockchain for payments across borders will help set the tone for the African Continental Free Trade Area.
The Chief Technical Officer of Digital Encode Limited, Oluseyi Akindeinde, said this during the Africa Tech Alliance Forum.
According to Akindeinde, blockchain reduces the risk of corruption and transaction costs.
The CTO of Digital Encode, an information security management and compliance advisory company, cited an example of Pan-African Payment and Settlement System, which is expected to facilitate the expected increased volumes in cross-border payments across the continent.
He added that blockchain would allow peer-to-peer payments without an intermediary.
He said, “With it, participants will no longer need to convert local currencies into hard currencies which then entailed the funds leaving Africa to be converted before being sent back again to the beneficiary bank – adding days to the transaction time.
“In addition, compliance, legal, and sanctions checks are performed instantly within the system. Near-instant payments process within 120 seconds.”
Akindeinde said Africa’s central banks must work in collaboration with the PAPSS to provide a payment and settlement service to which commercial banks, payment service providers and fintechs across the region could connect as ‘participants’.
He said most trade settlements in Africa were usually done in foreign currencies and typically in foreign banks.
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