Neobank Canza Finance is making waves in the world of decentralized finance (DeFi), offering decentralized foreign exchange (FX) for African currencies. According to CEO and co-founder Pascal Ntsama IV, Canza aims to address the challenges faced by millions of individuals globally in accessing financial services and products.
The Role of DeFi in Emerging Markets
Canza Finance leverages DeFi and digital assets to bridge the financial service gap in emerging markets. One of its notable services is Baki, a liquidity FX exchange designed specifically for African currencies. Baki aims to transform the African forex market by providing transparent currency swaps and zTokens, as explained by CEO Ntsama in a conversation with Cointelegraph.
“Many Africans have trouble accessing forex liquidity and currency swaps,” Ntsama shared. “This limits the use of US dollar-based services in countries dependent on imports.”
By offering DeFi solutions, Canza empowers individuals and businesses to engage in cross-border payments at minimal costs and reduced risks. DeFi, with its foundation on cryptocurrencies and blockchain, has the potential to alleviate the pain points faced by African economies.
Bridging the Gap with Baki
With Baki, Canza enables users to trade at official central bank prices without experiencing currency slippage and increased costs. This feature is particularly valuable as it allows individuals to conduct transactions at fair rates and swap currencies seamlessly.
“While the agent assumes local currency risk in FX swaps, Baki reduces risks by swapping similar currencies at the official central bank rate,” Ntsama explained. “This then enables the agent to swap again with the least slippage when entering US dollar positions.”
Moreover, the CEO highlighted the adaptability of Baki to fit the current regulatory climate in Nigeria, where blockchain technology is yet to see widespread adoption. Canza’s solution leverages existing user behaviors, harnessing the benefits of blockchain without disrupting established systems.
The Shift towards Crypto and Blockchain in Africa
African countries are increasingly embracing cryptocurrencies and blockchain technology. Canza aims to become a hub for businesses to engage in FX trades at a reduced cost, while individuals are finding bitcoin (BTC) as a preferred form of currency for cross-border transactions.
“Bitcoin has become a valuable asset for moving money between African countries,” noted a recent CNBC report. “Its potential was evident during the Africa Bitcoin Conference in Ghana, where BTC helped compensate for funds lost during a street protest in Nigeria.”
Additionally, notable developments include the Ministry of Technology and Science of Zambia testing technology to regulate crypto, signaling the country’s determination to become a regional hub for cryptocurrencies. Ripple, a leading crypto payments giant, also partnered with Onafriq to facilitate cross-border payments between 27 African countries and global markets.
