Africa is taking a bold step toward de-dollarization, following the BRICS bloc's lead. Fifteen African countries have adopted the Pan-African Payments and Settlements System (PAPSS)—a local payment network enabling trade settlements in domestic currencies, completely bypassing the US dollar.
Key Highlights of PAPSS
- 15 African nations, including Kenya, Malawi, Tunisia, and Zambia, now use PAPSS for trade settlements.
- 150+ commercial banks are integrated with the system.
- Reduces foreign exchange costs from 10–30% to just 1%.
- Supports regional currencies like the Nigerian naira, Ghanaian cedi, and South African rand.
- Potential $5 billion in savings if scaled continent-wide.
How PAPSS Challenges the US Dollar
PAPSS facilitates real-time gross settlement for cross-border transactions, becoming the financial backbone of intra-African trade. By reducing USD dependency, it empowers local economies and reinvests saved FX costs into development.
"A $200 million trade in USD could incur 30% in FX fees. PAPSS slashes this to 1%."
👉 Discover how decentralized finance is reshaping global trade
The BRICS Influence
PAPSS mirrors BRICS’ vision of a multipolar financial system, decentralizing currency power. BRICS is exploring a similar platform, aligning with Africa’s push for currency sovereignty.
The Big Picture
PAPSS symbolizes Africa’s quiet revolution:
- Eliminates dollar reliance
- Cuts transaction costs
- Boosts regional autonomy
This shift reflects a global trend toward localized, digital trade networks, potentially redefining the future of international commerce.
FAQs
Q: Which countries currently use PAPSS?
A: Kenya, Malawi, Tunisia, Zambia, and 11 others.
Q: How does PAPSS save costs?
A: By reducing FX fees from 30% to 1% via local currency settlements.
Q: Is PAPSS linked to BRICS?
A: While independent, it aligns with BRICS’ de-dollarization goals.
👉 Learn more about Africa’s financial transformation
Source: Watcher Guru
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