Canza Finance Launches Baki: The DeFi Solution to Africa's Forex Challenges
Summary:
Canza Finance CEO, Pascal Ntsama IV, has introduced Baki, a novel DeFi platform designed to counteract Africa's forex liquidity and currency swap challenges. The platform offers a decentralized foreign exchange mechanism for African currencies and accommodates swaps at central banking rates. Ntsama believes that this innovation will create a consolidated base for businesses to participate in intra-African and forex trades at reduced costs. Despite skepticism on the full adoption of Blockchain technology, especially in countries like Nigeria, Ntsama affirms that Baki is built to comply with the present regulatory environment, potentially increasing both industrial and institutional uptake rates.
Issues surrounding the accessibility of forex liquidity and currency swaps in Africa hinder the adequate exploitation of dollar-based amenities in the continent’s predominantly import-based economy. This predicament potentially provides an ideal environment for the solutions offered by the burgeoning sector of decentralized finance (DeFi), utilizing cryptocurrencies, blockchain infrastructure and decentralized applications (DApps). This prognosis comes from Pascal Ntsama IV, CEO of Canza Finance.
Ntsama has unveiled Baki, the neo-bank's newly developed DeFi platform. Its raison d'être is to counteract these identified financial challenges by delivering a decentralized foreign exchange mechanism for African currencies, offering swaps without unfavorable discrepancies, based on central banking fees.
Ntsama, who plays the dual role of both CEO and co-founder of Canza Finance (a revolutionary bank that facilitates decentralized inter-African transfers) expounded his belief to Cointelegraph that employing Baki for forex transactions in Africa can create a consolidated base for companies to partake in intra-African exchange and forex deals at lessened expenses. This progress would engender a more opportunistic business environment for trade within Africa.
The phenomenon of monies departing Africa when currencies such as naira are exchanged for cedis exerts inflationary pressure on dollar value and instigates extended costs through currency slippage. Baki is designed to offer a solution by facilitating currency swaps at the established central bank rates free of any expenditure.
Notwithstanding, estimations indicate that the DeFi presence in Africa could display an annual growth rate of 21.99%, attracting more than half a million users by 2027. Nevertheless, industry aficionados are advocating a review of these figures in light of the continuously escalating penetration of such blockchain products at the grassroots level.
In anticipation of possible acceptance issues in nations such as Nigeria (where blockchain technology still isn't fully operational despite the approval of relevant policies), Ntsama disclosed that Baki has been designed to cooperate with the present regulatory landscape. It seeks to exploit existing user habits to meet challenges linked with the application of blockchain technology. He was adamant that any positive amendment in regulations would significantly increase both industrial and institutional uptake of Baki.
Ntsama indicated that during a usual forex swap, the Agent retains local currency risk until a position refill opportunity arises, requiring the buyer to pay for the involved risk. Baki minimizes these risks by allowing for the swap of similar currencies at the official rate, allowing for a quick and minimally affected re-swap when entering USD positions.
Ntsama further explained that users and bodies who supply liquidity to Baki, gain income from the 80bps fee charged on every currency swap action occurring in the system. This income is then split, with Liquidity Providers getting 50%, Canza Finance native token holders receiving 25%, and Canza Finance as an institution taking the remaining 25%.
Published At
11/30/2023 8:02:57 AM
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