Intra-African payments are currently evolving between two major infrastructures: stablecoins, based on blockchain technology, and PAPSS, the institutional pillar of the AfCFTA. The future will likely resemble a hybrid model rather than a head-to-head confrontation where one eliminates the other.

Why do intra-African payments need to change?

Cross-border payments remain among the most expensive and slowest in the world, with significant fragmentation due to 42 national currencies and heterogeneous regulations. Dependence on correspondent banks using dollars or euros lengthens processing times (2 to 5 days) and increases costs, which directly impacts intra-African trade and SMEs.

Meanwhile, remittances from migrants to Africa (approximately $54 billion in 2023) remain burdened by fees that can exceed $6 per $100 sent, even though digital solutions are beginning to reduce these costs.

PAPSS: The Regulated Backbone of Intra-African Payments

The Pan-African Payment and Settlement System (PAPSS), developed by Afreximbank with the African Union, is a real-time gross settlement infrastructure that allows businesses to settle intra-African transactions in local currencies. In practice, the exporter’s bank sends payment instructions to the central bank, which then forwards them to PAPSS. PAPSS then routes the payment to the central bank and the beneficiary’s bank before the beneficiary receives the funds in local currency.

PAPSS connects central banks’ RTGS systems, clearing daily positions between African currencies before central banks settle residual balances, thereby reducing the need for hard currency and clearing delays. The objective is clear: to support the AfCFTA by facilitating intra-African payments and limiting the outflow of value from the continent.

PAPSS News: African Currency Marketplace

In June 2025, PAPSS launched the African Currency Marketplace, a platform enabling direct settlements in African currencies, bypassing the dollar or euro. This marketplace aims to open up hundreds of trade corridors that are currently virtually unusable due to the lack of functional direct currency pairs.

This market intends to reduce the time and costs associated with multiple conversions, while also providing market depth for illiquid African currencies. It positions itself as a strategic link for regional trade, as well as a future bridge to digital assets, particularly stablecoins.

Stablecoins: The New Crypto Backbone of African Flows

Stablecoins are crypto-assets pegged to a fiat currency (often the dollar) or a basket of assets, designed to offer relatively stable value. Between mid-2024 and mid-2025, sub-Saharan Africa recorded over $200 billion in on-chain value transfers, 43% of which were via stablecoins, a sign of widespread adoption.

By 2024, stablecoins already accounted for over 40% of crypto activity in Africa, driven by their use in payments, international trade settlements, and hedging against local currency depreciation. This trend is particularly strong in Nigeria, South Africa, and Kenya, where currency volatility and inflation are pushing individuals and businesses toward these digital assets.

Concrete Use Cases of Stablecoins in Africa

The main uses of stablecoins on the continent are structured around a few dominant use cases.

• Migration remittances and international payments: users save up to 85% on costs compared to traditional channels, with near-instant settlements.
• Inflation hedging: In countries experiencing sharp currency depreciation, dollar-backed stablecoins serve as a store of value and a holding account between transactions.
• Cross-border trade and e-commerce: Importing/exporting SMEs use stablecoins to pay suppliers, mitigate exchange rate risks, and reduce payment delays across multiple continents.

By eliminating multiple intermediaries, these assets enable settlements in minutes instead of days, improving cash flow and business flexibility.

Towards African stablecoins integrated with PAPSS

The rise of stablecoins has sparked the idea of an African stablecoin platform, as proposed by figures like Vera Songwe, to boost intra-African trade and further reduce transfer costs. Projects like cNGN in Nigeria are paving the way for stablecoins pegged to local currencies, which could potentially be interfaced with systems like PAPSS.

If PAPSS natively integrated regulated stablecoins (whether pegged to the dollar or African currencies), businesses could arbitrage in real time between crypto settlement and bank settlement, depending on their compliance, liquidity, and foreign exchange hedging needs. However, this would require coordinated regulatory work on anti-money laundering, reserve management, and issuer supervision.