How DeFi Can Bridge the Forex Gap in Africa, According to Banking CEO
Neobank Canza Finance‘s decentralized finance (DeFi) tech provides decentralized foreign exchange (FX) for African currencies, its CEO and co-founder Pascal Ntsama IV said.
Canza website stresses that access to financial services and products is “a massive challenge” for many millions of individuals globally.
Therefore, the neobank, which enables decentralized cross-border payments, leverages DeFi and digital assets to bridge the existing financial service gap in emerging markets.
Last year, Canza revealed an addition to its services: Baki. It is a liquidity FX exchange for African currencies, aiming to transform African forex “with transparent currency swaps and zTokens.”
It said at the time that,
“The key benefit Baki provides, and central to its architecture, is the ability to offer infinite liquidity at the official conversion rate. This is a significant pain point for any business trying to operate an intra-African trade network.”
Talking to Cointelegraph, CEO Ntsama explained that many Africans have trouble accessing forex liquidity and currency swaps. This limits the use of US dollar-based services in the countries dependent on imports – creating space for DeFi.
DeFi – leveraging cryptocurrencies and blockchain – can relieve many of the continent’s pain points.
In the case of Canza, this is where Baki comes in.
When users exchange local fiat currencies, funds exit Africa, which results in dollar value inflation. Currency slippage leads to increased costs. Baki, the CEO says, allows users to trade at official central bank prices and swap currencies without loss.
Furthermore, while the agent assumes local currency risk in FX swaps, Baki reduces risks by swapping similar currencies at the official central bank rate, Ntsama
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