F-Squared Podcast #5 - Inside Zone: Building Africa’s First Regulated Blockchain for Payments

A grounded conversation on rebuilding payment infrastructure without the crypto hype.

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Why I wanted to have this conversation:

The word “blockchain” still raises eyebrows in African banking circles, but what if the conversation started with payments, reliability, and cost instead?

Zone, co-founded by Obi Emeratom, is quietly building one of the most ambitious financial networks on the continent: a regulated Layer 1 blockchain built for payments. Not for speculation. Not for hype, but to replace the switching architecture that underpins everyday transactions POS payments, bank transfers, and merchant settlements.

I wanted to speak with Obi because he’s not just building tech, he’s selling it to Nigerian banks, integrating it with legacy systems, and pushing for regulatory frameworks that balance decentralisation with compliance. More importantly, he’s doing it from the inside out, with deep ties to the banking sector and a long history at Appzone (now split into Qore and Zone). This isn’t theoretical. It’s a discussion in what it takes to rebuild financial infrastructure layer by layer while keeping the regulators onside.

We unpack the value proposition behind blockchain-based payments, the hard truths of selling to banks, the architecture of a Zone node, and the roadmap to a future of regulated DeFi.

If you care about Africa’s financial plumbing, the future of interoperable payments, or the real-world evolution of blockchain in regulated markets—this episode is worth your time.

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In this episode, you’ll hear:

• Why Obi spun off Zone from Appzone to build a focused, regulated payments network on blockchain.

• How Zone pitched banks without even mentioning blockchain and why the idea of removing “middlemen” landed better.

• A full explanation of how a transaction flows through Zone’s peer-to-peer network, compared to traditional switches like Interswitch or NIBSS.

• Why reliability, reconciliation, and fraud are the three unsolved pain points that Zone is targeting.

• A plain English explanation of how a bank runs a blockchain node and plugs into the network.

• What makes Zone “regulated” and how they handle compliance reporting with a special observer node.

• The trade-offs of decentralisation and how Zone’s “regulated DeFi” approach strikes a balance between trust and innovation.

• Why onboarding banks is less about technology and more about managing stakeholder fears, from compliance to operations and infosec.

• Obi’s vision of payments as a consortium-led, software-defined rule engine, not just an infrastructure play.
  

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Key Lessons Learned:

Regulation and Network Design

• Why permissioned access and regulatory guardrails build trust with central banks and commercial banks alike.

• How Zone is evolving toward regulated DeFi, where developers build the system but governance is shared.

• Why getting a switch license wasn’t a compromise it was the Trojan horse for long-term transformation.
  

Architecture and Infrastructure

• What a Zone node actually is and how each bank runs its own infrastructure, reducing central points of failure.

• How settlement, reconciliation, and messaging all occur on the same ledger removing delays and mismatches.

• Why smaller fintechs can connect via shared nodes while larger players prefer full control through dedicated deployments.

Selling to Banks

• The playbook for navigating a complex B2B sales process inside legacy banks across business, IT, ops, risk, and compliance.

• Why manual operating manuals are often the biggest blocker and how Zone handles policy alignment with banks.

• How having legacy credibility from Appzone helped Obi secure trust despite the newness of blockchain.
  
  

Strategy and Long-Term Vision

• Why Obi sees Zone as a developer in a future consortium-based system enabling others to own and govern the network.

• The rationale for starting with POS and ATM rails, before moving to funds transfer and merchant payments.

• Why Zone Pay, a deep-link-based merchant payment solution, could solve reconciliation pain for large retailers.
  

Competitive Landscape

• How Zone is cooperating with NIBSS and competing with Interswitch in selected channels.

• Why Obi believes fintechs like OPay and Moniepoint will still need interoperability despite ambitions to build closed ecosystems.

• How a wallet-based architecture allows for 100% successful merchant payments with later liquidation.

Metrics and Roadmap

• Why TPV isn’t everything transaction count, use case diversity, and network participation matter more.

• The medium-term goal: scaling across Africa through remittance corridors, and eventually offering lending and CBDC-compatible wallets on-chain.
  
  

Obi’s calm, methodical approach to innovation is a refreshing counter to the usual hype in the blockchain space. If you’re a fintech operator, policymaker, or investor looking to understand the next phase of Africa’s payment evolution, this episode brings clarity from someone building the pipes.

🎧 Make sure to listen—and subscribe to the newsletter for more deep dives like this.

Transcript

Samora Kariuki: Got it. So, we can start now. So, I think it would be important to go back into time, right? So, you've founded Appzone back in 2008. That's almost 20 years ago now. It just shows how time is flying. And it was a fintech company that was building primarily products for the banking and financial services industry, right? And so you had core banking systems, you had card issuing systems, and you had a payment system as well. And I remember I think I interacted with one of your colleagues back in 2021. But then you decided to spin it off and then you restructured it rather, spin off the core banking system as Core, and that's moving on its own. You're running it as a separate business. And then now you also started Zone specifically as a blockchain enabled payments company. And there is Africa's first layer one regulated blockchain. So, before we go into the details of Zone, maybe walk us through the decision to have that restructuring of Abson three years ago.

Obi Emeratom: Absolutely. Thanks so much. Pleasure to be here. Basically, what happened is, just as you said, we had evolved initially from a system integrator. So, we product, company services, platform, banking, insurance, and we sort of developed this culture across different areas. So, as part of that culture, we incubated this initially was an experiment, very unlikely. Blockchain was new, not very favorably viewed by regulators that time. Cryptocurrency firms were being literally shut down. And so, and very new to banks, very highly unlikely. So, it was more of a small experiment. But as we evolved, that product began to gain the confidence of the banks, did a couple of proofs of concept, got some traction. And that just continued until we eventually got the regulator license as a decentralized business. It became clear that this was now a business that could sort of stand on its own. It's a serious product now with the buying of not just potential clients, but also existing clients. There was also some conversation with potential investors who were pointing us in the direction that it would make sense to be clear on what we do. A company for banking, also a payment company, kind of looks unfocused. It dilutes the focus. So, we took all this as feedback following that licensing from the central bank and then we took a decision to carry the business. So, take the legacy software related products into a separate entity and then have the payment focused business on blockchain as a separate entity. The other businesses became Core, and then of course, this became Zone.

Samora Kariuki: Got it. And when you explain the licensing element, you're saying it was an internal experiment for quite some time. You started seeing that this could be serious. And of course, outside the license and outside the investor conversations, was there any kind of initial commercial traction that made you think, wow, this looks interesting? We are seeing this kind of real interest in this specific area.

Obi Emeratom: Absolutely. That's what I touched on. So, the licensing was one, the investor conversation, but also, as I said, the buying of the initial set of institutions. What we saw was the idea made a lot more sense than we thought. And probably because of how we sold it, we didn't sell as much as the deep blockchain architecture and how it works. It was more of, hey, more high level, this is a decentralized architecture. We're saying we're removing the middleman.

Obi Emeratom: Yes. Yeah. So, yeah, as I was saying, the aside from the license and the feedback from investors, I mentioned that also the buying of the initial commercial banks we were engaging with was a very important sign. And I was trying to, and I always try to explain that I feel like it was also because of the way we approached the engagement. We didn't go too deep technically about blockchain and how blockchain works because of fear of whether they would fully understand. But we sold it at a more high level, a more high level where we're saying this is a network that is decentralized, allowing banks participating to interact, connect directly with each other without a middleman. So you're essentially removing a middleman. And the things that middleman bring, including cost, reliability issues, friction with operations, those things can go out. So, every negative thing that a middleman in the architecture would bring, once you remove the middleman, you're essentially removing those things. Yes. And so they got it. So that more favorable response than we expected was part of what drove us to say yes, this can actually stand on its own.

Samora Kariuki: Yeah, it's a very interesting insight. And before you get into decentralized blockchains, Layer One, etc., at a very simple level, you're saying that we are a network, a very basic level, that allows every participating bank to be a partner or an active participant in this network. And on top of that, some of the friction that we have when it comes to this intermediary, be it NIBBS or someone else, goes out the window when you work with Zone. Is that kind of how you summarize what Zone is at a very high level?

Obi Emeratom: Absolutely. Absolutely. That's what it is. It's a financial network, but a decentralized financial network focused on processing payments as opposed to a centralized financial network. So it's a financial network because the participants on the network are financial entities like banks and FinTechs. It's decentralized because the interaction within that network is peer-to-peer, is direct. Every entity interacts directly to every other entity. So essentially that's, and the focus is payment. Yes.

Samora Kariuki: And that leads me now to the next point, right? So, Nigeria is, I think, Africa's largest fintech market between 2020 and 2024. It accounted for around 36% of VC funding. But on top of that, I think last year the stats were that Nigeria processed $720 billion in terms of digital payments. That's something quadrillion, which is quite a milestone. Now, of course, maybe inflation could have played a part in that, but it's still an impressive number when you look at just the volume of transactions. And so that, of course, is riding on NIBBS, Interswitch, and all these kind of traditional intermediaries or intermediaries as we'd call them. And so from outside looking in, it seems like it works and it's a success, right? So, maybe walk us through again, from an outsider's perspective, $720 billion is no small feat. The kind of growth that we're seeing, I think 79% last year, year-on-year growth in digital transaction values is quite impressive. And I think NIBBS has consistently set a number of records. It seems to me that the market is saying that some of this, some of these intermediate issues, are not issues at all. Right? So maybe you can go deeper and say what were the fundamental problems that the banks were saying, apart from cost, that was really hampering or at least made them attracted to Zone? Because from the outside, it looks like everything else is working perfectly.