The CEO of neobank Canza Finance, Pascal Ntsama IV, believes that decentralized finance (DeFi) could address Africa’s foreign exchange challenges.
- Forex liquidity and currency swaps are challenging for many in Africa, limiting the use of USD-based services and creating a need for innovative solutions.
- Canza Finance’s DeFi technology, Baki, seeks to address these challenges by providing decentralized foreign exchange for African currencies, enabling cost-effective swaps at central bank rates.
- Baki aims to create a hub for businesses to engage in intra-African and FX trades, reducing costs associated with currency slippages and facilitating seamless transactions.
Addressing Forex Challenges in Africa
Forex liquidity and currency swaps pose significant challenges for many in Africa, limiting access to USD-based services and impeding the growth of import-dependent economies. Canza Finance’s CEO, Pascal Ntsama IV, sees an opportunity for decentralized finance (DeFi) to provide a solution.
Creating an Inclusive Trade Hub
One of Baki’s primary objectives is to create a hub for businesses, enabling them to participate in intra-African and FX trades at a reduced cost.
DeFi could solve Africa’s foreign exchange problems, neobank CEO says: The CEO and co-founder of neobank Canza Finance claims that utilizing Baki for foreign exchange trades in Africa creates a hub for African businesses to… https://t.co/UqGAx7B6mL #CryptoNews #crypto #Bitcoin pic.twitter.com/nenw4REJX1
— @zimisss (@zimisss) November 30, 2023
Traditional exchanges often lead to funds exiting Africa when exchanging local fiat currencies, causing inflation and increased costs. Baki addresses this issue by facilitating currency swaps without loss, trading at official central bank prices.
Projected Growth and Regulatory Adaptability
DeFi in Africa is poised for significant growth, with a projected annual growth rate of 21.99% and an estimated half a million users by 2027. Despite concerns about regulatory challenges, Ntsama is optimistic about Baki’s adaptability.
Even in countries like Nigeria, where blockchain adoption is still emerging, Baki is built to align with existing regulatory frameworks and leverage current user behaviors.
In conclusion, Canza Finance’s innovative approach to leveraging DeFi technology through Baki holds promise for addressing Africa’s foreign exchange challenges.
By providing cost-effective solutions for currency swaps and fostering intra-African trade, Baki aims to contribute to the growth of DeFi in Africa while navigating current regulatory landscapes.