Offline CBDCs and Financial Inclusion: Lessons from Paycode’s West African Demonstrations
- Gabe Ruhan
- Jul 10
- 4 min read
As central banks around the world race to explore the potential of Central Bank Digital Currencies (CBDCs), one recurring question dominates the conversation: can CBDCs truly solve the longstanding barriers to financial inclusion?
At Paycode, this question is not theoretical. Over the past year, we have successfully demonstrated to two leading West African banks how offline CBDC transactions can function securely and efficiently - even in areas with no mobile or internet connectivity. Our work directly aligns with the recently released UNDP report, 'Driving Financial Inclusion Through CBDCs' which outlines a comprehensive, user-centred methodology for deploying CBDCs in emerging markets.
This blog explores how our real-world implementation complements and validates many of the insights and recommendations in the UNDP report.
Why Offline CBDCs Matter
One of the most persistent barriers to financial inclusion in West Africa - and across much of the Global South - is connectivity. People living in rural areas often lack reliable access to internet or mobile networks. That makes most digital financial services inaccessible, especially when they rely on online verification and cloud-based infrastructure.
Offline CBDC functionality - where users can send and receive digital currency without a live connection - represents a game-changing innovation. It opens the door to real-time financial services at the last mile, enabling even the most remote populations to receive government payments, make purchases and build a financial footprint.
According to the UNDP report, the ability to support offline transactions should be a core design feature of any CBDC that aims to promote inclusion. Paycode’s demonstrations show that this isn’t just aspirational - it’s practical and achievable now.
The Demonstration: Two Banks, One Mission
In partnership with two large commercial banks in West Africa, Paycode conducted a technical pilot that proved CBDC transactions could be securely processed and synchronized even in completely offline environments. Our biometric smart card platform allowed individuals to authenticate themselves and initiate transactions with no network access. When reconnected, data would automatically synchronize with the bank's systems and the central bank ledger.
These demonstrations addressed three major design imperatives highlighted by UNDP:
Usability Without Smartphones: Paycode’s biometric card system works with or without a smartphone, ensuring access for people with only basic feature phones - or no phone at all.
No Need for Full KYC: For low-value wallets, our platform supports tiered identification, allowing onboarding without formal IDs - an important feature in regions with weak civil registration systems.
Security and Reconciliation: Our system uses advanced cryptographic techniques to prevent fraud, ensure auditability and reconcile transactions seamlessly when the card is brought back online.
From Theory to Practice: Aligning with UNDP’s Five-Stage Methodology
The UNDP report outlines five stages for CBDC implementation: understanding financial inclusion needs, CBDC preparation, user-centric design, piloting, and full implementation. Here’s how our approach fits into this framework:
1. Understanding Financial Inclusion Needs
We worked with bank partners to identify their unbanked populations - primarily rural women, smallholder farmers, and informal traders - who remain excluded due to lack of IDs, smartphones, or literacy. This echoed the report’s call for “gender-informed analysis” and “community-led onboarding.”
2. CBDC Preparation
We defined key performance indicators including successful offline transactions, time to sync, user trust levels and agent-assisted onboarding rates. Stakeholders included central banks, commercial banks, regulators and mobile money operators.
3. User-Centric CBDC Design
UNDP stresses the importance of simplicity, accessibility and privacy. Paycode’s interface is icon-based and multilingual, suitable for low-literacy users. Our biometric ID solution ensures secure wallet access while eliminating the need for passwords or PINs.
4. Piloting
The pilot tested everything from transaction reliability to offline limits and dispute resolution protocols. Offline CBDCs were used in real-world scenarios including cash disbursements for low income beneficiaries and fertilizer subsidies.
5. Implementation Readiness
Our technology is ready for full-scale deployment. It meets the UNDP’s recommendations for responsible digital payments, including user recourse mechanisms and integration with national ID systems.
Real-World Use Cases: Beyond Financial Inclusion
CBDCs aren’t just about giving people a new way to pay. When designed right, they become infrastructure for development.
As highlighted in the UNDP report, programmable CBDCs could improve everything from disaster relief to pension delivery. In our pilots, we’ve already seen how governments can leverage CBDCs to deliver conditional cash transfers with built-in rules and expiration dates.
This kind of programmable disbursement dramatically reduces fraud and leakage, while ensuring the funds serve their intended purpose.
Lessons Learned
Offline is Essential, Not Optional
CBDCs that require constant internet access risk becoming irrelevant for the people they aim to help. Offline capability must be a baseline requirement.
Biometric Identity Builds Trust
Users are more comfortable transacting when they can see and feel a physical card and know their identity is secure. For many first-time users, biometrics are more intuitive than PINs or passwords.
Integration is Key
CBDCs can’t operate in a vacuum. The most effective rollouts will be those integrated with digital ID systems, payment rails, and community-based agents.
Financial Literacy Must Be Built In
We embedded tutorials and simple prompts into the transaction process to educate users on how and when to use their CBDC wallets.
What’s Next?
We believe that offline, biometric CBDC platforms like ours are a critical component of inclusive financial infrastructure. Our work with West African banks demonstrates that this is not a futuristic vision - it’s happening now.
As central banks and development agencies move from exploration to implementation, we urge them to consider a modular, offline-first design that reflects the real-world conditions faced by the unbanked.
Paycode stands ready to support central banks and partners in deploying resilient, secure, and user-friendly CBDC systems that work for everyone, everywhere - even without a signal.
