Central Bank Digital Currencies (CBDCs) in Africa : Blockchain Architecture for Cross-Border Payments and Monetary Sovereignty

Abstract

This paper investigates the strategic role of Central Bank Digital Currencies (CBDCs) in transforming Africa's financial landscape. It argues that a blockchain-based architecture is a critical tool for addressing two of the continent's most pressing economic challenges: inefficient cross-border payments and the erosion of monetary sovereignty from stablecoin adoption. The analysis moves beyond a domestic retail CBDC model to propose a "Pan-African Payment CBDC Network." This framework leverages a permissioned distributed ledger (DLT) to enable instant, low-cost, and transparent multi-currency settlements, directly supporting the goals of the African Continental Free Trade Area (AfCFTA). The paper further details how a sovereign digital currency can defend monetary policy by providing a safe digital alternative to stablecoins, improving policy transmission, and reinforcing the national currency as the primary unit of account. Finally, it critically examines the implementation challenges—including financial disintermediation, technical infrastructure, and political coordination—and offers a phased, collaborative roadmap for achieving regional economic resilience and sovereignty through digital currency innovation.