Diffie can solve Africa’s foreign exchange problem, said the CEO of Neobank

Foreign currency exchange and money transfers are difficult to access for many in Africa, limiting the use of US dollar-based services in the continent's import-dependent economies. This creates a gap that decentralized finance (DeFi) can address, using cryptocurrencies, blockchain networks and services, said Pascal Nsama, CEO of Kanza Finance IV.

The CEO and co-founder of Neobank, which enables decentralized cross-border payments for Africans, told Cointelegraph that Kanza's new DeFi technology bank aims to solve this problem by providing decentralized foreign exchange (FX) for African currencies. Enable floating free from central bank rates. It also seeks to create a hub for businesses to engage in FX trading in Africa at discounted rates.

Funds flow out of Africa when they exchange local African fiat currencies, increasing costs due to dollar inflation and currency slippage. Baki solves this by allowing traders to exchange currencies without loss, trading at central bank rates.

Diffie is predicted to grow 21.99% annually in Africa and reach more than half a million users by 2027. However, as the mainstream adoption of blockchain products reaches new highs, industry experts have debated revising these forecasts.

In response to whether the Baki service would work in countries such as Nigeria, where blockchain technology has not been widely adopted even after its approval, Ntsama said Baki is built to work with the current regulatory climate as it uses user features to overcome problems with blockchain technology. . He stated that the positive change in regulation will lead to greater industrial and institutional adoption for Baki.

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Ntsama said that with a typical FX swap, the agent would take the local currency risk and charge the buyer a price for that risk until they could recycle the position. Bucky reduces these risks by exchanging the same currencies at the official rate, allowing the agent to convert with minimal slippage when entering a US dollar position.

According to Ntsama, users and entities that provide liquidity to Baki will earn from the 80 basis points fee charged on every transaction in the system. This product is paid 50% to liquidity providers, 25% to Canza Finance native tokens and 25% to Canza Finance itself.

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