African equity basket
Listed African businesses as economic exposure. A floating investment value, with market and securities risks.
Africa does not need another currency. It needs its currencies to be able to meet.
TSC is intended to be a regulated, institutional settlement instrument that lets value move between African currencies, without replacing national currencies. Its legal structure and supervisory safeguards would require approval in each participating jurisdiction.
Chinedu runs a fabric wholesale business on the Island. He owes Ama, his supplier in Kumasi, 25,000 Ghana cedis for a container of woven cloth. He has the money. It is in naira, in a Nigerian bank.
One possible route involves conversion through a major international currency and correspondent banking relationships. The actual route, fees and timing depend on the banks and available liquidity.
Ama waits for confirmation before shipping. The example illustrates the friction that can arise when direct currency liquidity is limited.
In the proposed model, participating institutions validate the payment, secure an executable quote and coordinate the naira and cedi legs. An authorised TSC arrangement could settle the interbank obligation, subject to agreed liquidity and finality rules.
Ama receives cedis after confirmed settlement. Neither customer would need to hold TSC. The actual completion time would depend on the participating rails.
The design objective is simple: local currencies remain under local rules, while regulated institutions gain another way to coordinate cross border settlement. The detour could become less necessary.
Direct liquidity between some African currency pairs remains limited, and international correspondent routes continue to play an important role in regional payments.
A historical IMF example reported a costly and slow Ghana to Nigeria payment; this should not be read as a current corridor benchmark. AfCFTA aims to reduce trade barriers over time. Payment friction remains one of the challenges to regional commerce.
We explored different ways to represent African economic value. Each solves a different problem. The preferred first step is an institutional settlement proposition, not a retail currency or investment fund.
Listed African businesses as economic exposure. A floating investment value, with market and securities risks.
Commercial invoices as underlying claims. Introduces credit, maturity and collection risks.
Potential backing for a redeemable claim. Reserve assets, valuation and redemption terms remain open.
Trade, commerce and payment activity create demand for infrastructure, not collateral for redemption.
Designed for short duration use between regulated institutions. Issuance, legal rights and reserve model remain to be determined.
A possible African economic basket or common reference unit, without conflating it with the initial settlement instrument.
TSC is intended to be a regulated, institutional settlement instrument. It would help eligible institutions coordinate obligations between African currencies. Its settlement asset, legal rights, liquidity arrangements and permitted corridors remain design and approval questions.
Every payment starts and ends in a national currency, in a national bank account, under national law.
Each currency conversion must follow the applicable local market rules and authorised dealing arrangements.
Eligible obligations may be offset under enforceable agreements, subject to liquidity and risk controls.
Proposed access controls would give supervisors authorised views, subject to law and agreement.
In every journey the customer deals only with their own bank, in their own currency. TSC lives one level down, between institutions. The people and businesses are illustrative; the steps are the intended design.
A consumer-goods group has plants in Nigeria, Ghana and Kenya. Every month its subsidiaries invoice one another for raw materials, packaging and shared services. Some obligations may require separate currency conversions and settlement instructions.
Under an agreed multilateral arrangement, eligible obligations could be converted into a common reference unit and offset. Actual settlement requirements would depend on currency conversion, legal enforceability and liquidity safeguards.
On payday Akosua sends GHS 3,000 to her mother in Takoradi through her bank or a licensed money-transfer operator. Her provider runs the same seven steps behind the scenes.
Her mother receives cedis in her bank or mobile-money account. The provider could present an executable quote and transparent fees, subject to liquidity and the participating rails. Akosua never touches TSC.
Trade runs both ways. Nigerian buyers pay Ghanaian sellers, and Ghanaian buyers pay Nigerian sellers, on the same day. A legally enforceable netting framework could offset eligible obligations. The diagram below demonstrates arithmetic only, using a common reference unit. It does not estimate actual African payment flows or funding savings.
Press After netting to see what is left.
Netting is used in established payment arrangements. Applying it across currencies requires common valuation rules, participant agreements, liquidity and default management.
The proposed architecture must preserve domestic monetary authority and comply with national payment and FX rules. Supervisory features are proposed, not currently approved.
Legal classification, reserve assets, valuation and redemption terms require regulatory design and approval.
Retail distribution and domestic circulation are excluded from the initial design. Wider monetary effects still require assessment.
Converted onshore by licensed dealers. Capital-flow rules and documents are checked before value moves.
Corridor limits, access and pause rights would be defined with competent authorities before any authorised operation.
The group vision separates commerce, orchestration, issuance and custody. The businesses are at different stages; any future legal entities, licences, balance sheets and intercompany contracts must be established as applicable.
ShopBook for merchants and distributors. Creates the invoice and payment reference Chinedu pays.
MVP demo · pilot proposedCompliance checks, routing, quotes, reconciliation and evidence. Never holds customers' money.
Platform built · pilot integration under wayWould issue and redeem an externally issued TSC, with reserves and redemption rules, once authorised.
Proposed · subject to licensingWould safekeep the reserves that back TSC, for institutional clients only.
Proposed · subject to licensingValue settles on the balance sheets of licensed banks and providers. Pactis Technology Ltd holds a Nigerian PSSP licence. The scope of any proposed settlement, issuance or cross border activity requires separate legal assessment and any necessary permissions.
The platform coordinates an instruction. The participating institutions and their payment systems determine when funds have legally settled.
Record finality evidence and reconcile institutional positions
Stop further release where possible, invoke agreed recovery, reversal or compensation procedures and escalate exceptions
Illustrative design, not a claim of cross system atomic settlement. Legal finality, prefunding, insolvency treatment and participant default procedures require corridor specific agreements.
A settlement instrument earns trust by answering hard questions before they are asked.
In the pilot, TSC is an internal clearing credit, used only to measure and net obligations between institutions. Netting could reduce gross settlement obligations, but funding and reserve needs remain subject to testing.
The unit and reserve design of an externally issued TSC is deliberately left open for participating regulators to shape. Options include a reference currency, a basket of African currencies, or settlement directly in central bank money.
TSC is conceived as complementary to existing infrastructure. Interoperability with PAPSS is a potential design pathway, not an established partnership or integration.
Funding requirements would depend on the netting agreement, settlement cycle, collateral, liquidity buffers and default arrangements. No quantified saving is assumed.
From competing quotes by participating liquidity providers. The design would seek executable quotes from eligible liquidity providers. Quote validity and the applicable FX market rules would be defined per corridor.
The platform can coordinate instructions and record confirmations, but it cannot by itself guarantee atomicity across independent fiat systems. Each corridor needs rules for settlement finality, partial failure, recovery and dispute handling.
The proposed design includes structured payment messaging and a verifiable ledger. Specific message conformance, participant access and independent verification require integration testing.
The intended workflow applies risk based identity checks, applicable sanctions screening, relevant transfer information obligations and corridor specific rules. Screening, escalation, blocking and audit requirements must be validated with each regulated participant.
Institutions pay a settlement fee measured in basis points on the value they move. Halites adds a second engine: the commercial activity that creates payments in the first place. The opportunity grows with intra-African trade itself.
Each stage opens only when regulators and participants agree the previous one has proved itself. The sequence is fixed; the dates are not.
The third stage happens only if regulators authorise it. If they choose a different model, such as settlement directly in central bank money, the first two stages still stand on their own.
It is 9 o'clock on a Monday, ten years on.
He now runs three warehouses. He buys cloth from Kumasi and shea butter from a women's cooperative in northern Ghana, and sells Kano leather goods to retailers in Nairobi. He pays and gets paid across borders the way he deals with a shop down the road. He has not bought a dollar to pay an African in years.
She exports to six countries. She prices in cedis and gets paid in cedis. Her bank lends to her against invoices it can see being paid, on time, every month, across borders.
Officials open a screen each morning and see their corridors live: what moved, what was netted, what was stopped and why. They set the limits. They hold the switch.
A successful regional settlement model could reduce reliance on some external correspondent routes. Any reserve or foreign currency savings would need to be measured.
None of this needs a single currency, a new central bank or anyone to give up sovereignty. It needs a place where Africa's currencies can meet, and rules that every central bank trusts.
The Tenites simulation architecture offers a starting point for technical validation. The externally issued TSC and its legal arrangements remain proposals. The decisions that matter most (the safeguards, the corridors, the reserve model and the first pilots) are ones we want to make together.