Building Resilient Payment Systems in Fragile States: Lessons from the IMF and the Role of Offline Digital Finance
- Gabe Ruhan
- 7 days ago
- 4 min read
Fragile and conflict-affected states (FCS) are home to more than one billion people. In these environments, payment systems face relentless shocks - power outages, damaged telecoms, cyberattacks, destroyed banking infrastructure, and political fragmentation. When payments fail, the consequences are immediate: humanitarian aid stalls, salaries cannot be paid, markets shut down and families lose access to essential goods.
The IMF Fintech Note, “Payment Resilience in Fragile and Conflict-Affected States: Lessons for Central Bank Digital Currency (CBDC)”, provides the most comprehensive analysis to date on what it takes to maintain payment continuity in the most challenging environments. Drawing on experiences from Ukraine, Sudan, Yemen, Gaza, Haiti, Tuvalu and CEMAC, the report outlines practical measures that keep financial systems functioning even under severe stress.
For Paycode, whose mission is to enable inclusive digital finance that works with or without connectivity, the IMF’s findings reinforce what we see on the ground every day: truly resilient digital payments must be designed for offline, low-power, low-connectivity environments.
Below are the report’s key insights, integrated with Paycode’s real-world experience including completed offline CBDC trials in both Nigeria and Ghana.
1. Resilience Is an Ecosystem, Not a Single Technology
The IMF outlines five interlinked layers required for a functioning payment system:
Users
Payment solutions
Intermediaries
Payment infrastructure
Connectivity
In fragile environments, multiple layers often fail simultaneously. A resilient architecture must therefore work even when connectivity is unreliable, electricity is unavailable, or the banking system is disrupted.
Paycode’s biometric, offline-first payment technology sits specifically at the intersection of the solution, intermediary, and connectivity layers - strengthening the entire ecosystem.
2. Redundancy Is Essential for Continuity
Redundancy - the presence of fallback systems - is the core of payment resilience.
The IMF provides examples:
Ukraine expanded its RTGS from three to five mirrored sites.
Merchants adopted dual connectivity to keep POS devices operational during blackouts.
Solar-powered POS devices in Gaza kept payments alive during grid collapse.
At Paycode, offline processing itself is the redundancy layer. Our system continues functioning in areas with no network coverage for months at a time, then synchronises securely when connectivity returns.
3. Distributed Infrastructure Prevents Systemic Failure
The IMF shows how distributed designs - satellite connectivity, cloud redundancy and decentralised power protect payment systems from localised shocks.
Examples include:
Starlink restoring connectivity in Sudan and Ukraine
Hybrid cloud models explored in the CEMAC region
Solar and generator-powered banking infrastructure in Gaza and Ukraine
Paycode aligns closely with this approach through country-hosted, locally distributed infrastructure that supports national sovereignty while enabling last-mile continuity through offline devices.
4. User-Centric Design Determines Real-World Adoption
Whether a payment system works during crisis depends on what people actually trust and can use. Sudan’s Bankak app doubled usage when cash stocks disappeared. Haiti saw rapid uptake of digital debit solutions that bypassed unsafe cash pickup locations. Gaza used interoperable wallets and QR codes for humanitarian disbursements.
Paycode’s design - biometric, simple, device-agnostic, literacy-friendly - ensures that users continue accessing digital value in high-stress conditions.
5. Digital Identity Is a Foundation for Resilience
The IMF highlights the importance of digital identity:
Ukraine’s BankID protected continuity for millions of displaced people.
CEMAC launched a new biometric ID system with rapid issuance.
Gaza faced ID verification challenges during telecom outages.
Paycode enhances national ID systems with offline biometric authentication and is now integrating self-sovereign identity (SSI) models to ensure continuity even when central systems are unreachable.
6. CBDCs and Stablecoins Can Strengthen Resilience (But Only With Offline Capability)
One of the most significant conclusions of the IMF report is that digital currencies - CBDCs and stablecoins - can support payment resilience only if they incorporate offline functionality.
Both Nigeria and Ghana have now completed successful offline CBDC pilot programmes:
Nigeria – Offline eNaira Trial (Completed)
The Central Bank of Nigeria tested offline CBDC transactions using proximity-based authentication methods in rural and low-connectivity environments. These trials demonstrated that CBDC value can move securely between users without real-time connectivity, supporting financial inclusion and resilience.
Ghana – Offline eCedi Trial (Completed)
Bank of Ghana conducted one of the world’s most advanced offline CBDC pilots, including hardware-based offline eCedi payments. Tests validated the ability to transact in remote communities with no mobile coverage, using secure offline devices, confirming the viability of CBDCs in frontier environments.
These national trials directly align with Paycode’s architecture and our deployments:
Paycode supports offline CBDC transaction flows similar to the approaches tested in Nigeria and Ghana.
Our technology enables CBDC acceptance at rural merchants, even during network outages.
Offline biometric authentication ensures secure value transfer without needing smartphones or connectivity.
The IMF’s conclusion, that CBDCs must include offline capability to be relevant in fragile states, directly validates Paycode’s design philosophy.
7. Humanitarian Payments Must Be Built for Crisis, Not Stability
Humanitarian agencies increasingly use digital vouchers, wallets, and transfers. But many systems depend on:
centralised servers
foreign banks
continuous connectivity
When infrastructure collapses, these models fail.
Paycode provides:
offline G2P and aid distribution
biometric verification to ensure correct beneficiary targeting
integration with CBDCs, stablecoins and fiat settlement rails
24-hour settlement through partner banks
This model directly aligns with the IMF’s recommendations for resilient, sovereignty-aligned payment systems in crisis settings.
Conclusion: The Future of Resilient Payments Is Offline
The IMF’s latest research confirms what countries like Nigeria and Ghana have already proven through completed CBDC pilots: payments must work both online and offline if they are to be resilient in fragile and remote environments.
Paycode is at the forefront of this shift, providing:
biometric offline payments
country-hosted last-mile payments infrastructure
CBDC and stablecoin offline integration
interoperability across banks, mobile money, and humanitarian rails
resilience designed for environments where infrastructure fails regularly
The path forward is clear: the future of digital money, whether CBDC, stablecoin or fiat, must include secure, offline-first capability.
This is exactly the future Paycode is building.
