Focus on the market｜Web3 payment track landing application - Africa's stablecoin market
Web3 Payment White Paper: In 2025, Stablecoins in Africa
Reprinted from Teacher WILL, WILL Awang
Preface
The world is flat
Our world has shifted from isolated local economies to a tightly interconnected global system, prompting Thomas L. Friedman to state, "The world is flat." While the internet has made the flow of information free and global, the infrastructure supporting the flow of funds still largely relies on frameworks established before the internet era, making the transfer of funds/values still difficult and costly.
Although some regional financial innovations can accelerate the flow of funds, the financial rails supporting Africa have not synchronized. The traditional financial system has failed to provide stability, accessibility, and efficiency, leaving people exposed to the risks of inflation and financial uncertainty, with limited control over savings and difficulty accessing global markets. Just as the region leaped from desktop computers directly into mobile, Africa is now ready to move beyond outdated banking infrastructures to actively embrace stablecoins.
We can no longer limit our vision to the transactional use cases of stablecoins in the native crypto market; we should view stablecoins from a new perspective regarding their real-world use cases in non-crypto native scenarios. Stablecoins have become an important part of the cryptocurrency narrative in Sub-Saharan Africa and a popular hedging tool against long-term inflation and currency depreciation.
"Stablecoins based on blockchain networks are one answer. Stablecoins provide our first real opportunity to change money in the same way that email changed communication: making it open, instant, and borderless. This is a WhatsApp moment for currency/value, with a global network built through blockchain and stablecoins that can benefit everyone." —Chris Dixon, a16z
I. The Quiet Revolution of Stablecoins in Africa
Africa has the highest mobile money penetration rate globally, deeply embedded in daily life, demonstrating the demand for alternative financial solutions. Thus, the emergence of stablecoins is a logical progression, offering a seamless way to access financial services with just a mobile phone. Stablecoins can further develop on this foundation, increasing financial inclusion and enabling more efficient borderless transactions.
According to Chainalysis data, Africa is the fastest-growing region for cryptocurrency adoption, with a year-on-year growth rate of 45% from 2022-2023 to 2023-2024, surpassing other emerging markets like Latin America at 42.5%. This rapid growth highlights the enormous potential for stablecoin applications, especially in regions where banking penetration remains at the lowest levels globally.
"Stablecoins have already become a reality in cross-border payments in Africa... Other parts of the world are just catching up." —Zekarias Amsalu, Co-Founder of Africa Fintech Summit
One of the main drivers of stablecoin adoption in Africa is the FX crisis faced by many countries. Approximately 70% of African nations face foreign exchange shortages, making it difficult for businesses to obtain the dollars needed for operations. In countries like Nigeria, the local currency Naira (NGN) has depreciated significantly, and stablecoins provide the urgently needed alternative. "Banks have no dollars, the government has no dollars, and even if they do, they won't give them to you." —Chris Maurice, CEO & Co-founder of Yellow Card
Over the past three years, stablecoins have become an integral part of Africa's financial system, providing a reliable means of value storage, cross-border remittances, and trade without relying on heavily fluctuating and unstable local currencies. Dollar-backed stablecoins like USDT and USDC are filling the gaps left by traditional finance, enabling people in dollar-scarce economies to access stable value storage.
From remittances and retail savings to B2B trade and cross-border payments, stablecoins are addressing issues such as Dollar Access, Instant Settlement, and FX Inefficiencies across the African continent, particularly in markets where traditional payment channels are lacking.
Africa is the world's most dynamic growth market, with the fastest population growth, the youngest median age, and nine of the twenty fastest-growing economies. Africa has 400 million mobile payment users, and the scale of digital finance adoption is already substantial. Stablecoins represent the next leap forward, transforming smartphones into globally connected dollar accounts. Looking ahead, a decade from now, more people in Africa will have crypto wallets and use stablecoins for everyday transactions rather than traditional bank accounts.
"You don't have to educate users; life will force them to use it." —Sky, Co-founder of ROZO
II. Projects Driving Future Stablecoin Adoption
Chuk from Paxos has drawn us an ecosystem map covering payment channels, use cases, and companies to showcase the depth of this transformation. While many market maps display the global stablecoin ecosystem, few focus on Africa's role in shaping its financial future. Therefore, we created this map to showcase the builders and use cases that are redefining the financial infrastructure across the African continent.
(Mobile Money to Global Money: Africa’s Stablecoin Revolution, Chuk @ Paxos)
In the past three years of investment in the African market, we have seen more and more companies building around stablecoins, each playing a key role in driving the adoption and innovation of stablecoins. Here are some of the most notable players, along with key growth and financing data that highlight the rapid expansion of the industry.
Yellow Card: One of Africa's leading crypto asset exchanges, operating in 20 countries across the continent. The largest and first licensed stablecoin entry platform in Africa. Yellow Card allows users to seamlessly exchange fiat for cryptocurrency and vice versa. In 2024, the platform's annual trading volume doubled from $1.5 billion in 2023 to $3 billion.
Conduit: Provides stablecoin payment services for import and export businesses in Africa and Latin America. Annualized TPV is projected to soar from $5 billion in 2023 to $10 billion in 2024.
Juicyway: A Lagos-based startup that utilizes stablecoins to facilitate cross-border payments. Since 2021, Juicyway has processed a total of $1.3 billion in payments.
Bridge: Founded in 2022, Bridge was acquired by Stripe for $1.1 billion just two years later. Bridge has enhanced the global stablecoin payment infrastructure. It serves most African payment companies and facilitates stablecoin payments in Europe, the US, and Asia.
Jia: A blockchain-based fintech company that provides loans to SMEs in emerging markets. In 2024, Jia's cumulative loan issuance exceeded $10 million, up from $2 million the previous year, with an internal rate of return (IRR) of 24% and a default rate of 0.14%.
Onboard: A global P2P trading protocol that allows anyone to access on-chain finance anywhere. Nestcoin raised $1.9 million in its last funding round to drive product growth.
KotaniPay: Provides stablecoin settlement solutions for businesses and users. KotaniPay is developing an API product that connects blockchain and local payment channels. In 2023, KotaniPay secured $2 million in seed funding.
Accrue: Building a USD stablecoin proxy network to expand cross-border payment infrastructure. Secured $1.58 million in seed funding to scale operations.
Convexity: Developed Nigeria's first regulated stablecoin, cNGN. The company has collaborated with the Central Bank of Nigeria since 2021 and received a temporary license from the Nigerian Securities and Exchange Commission (SEC) in 2024.
Honeycoin: A platform for cross-border remittances, bill payments, purchasing airtime, and online consumption. GTV skyrocketed from $40 million in the previous quarter to $500 million in Q4 2024.
Paycrest: A decentralized liquidity protocol that supports instant, low-cost payments powered by stablecoins. They also developed Zap, a DApp for seamless payments between cryptocurrency and fiat, winning the Base 2024 Global Onchain Summer Buildathon championship. Today, Zap is ready to go into production as Noblocks, the first interface for instant decentralized payments supported by a distributed liquidity node network, capable of connecting with any bank or mobile wallet.
Haraka: A stablecoin-driven micro-lending protocol aimed at underserved entrepreneurs in emerging markets. Haraka utilizes a reputation-based credit scoring system and showcases early commercial validation through partnerships with Grameen Bank and Mercy Corps.
Many of these companies have experienced significant growth over the past two years and are at the forefront of stablecoin innovation in Africa.
For the global fintech community, the question is not whether stablecoins will go mainstream. The question is, what can we learn from the places where stablecoins have already become widespread—Africa?
III. Stablecoins are Solving Everyday Problems in Africa
"In Africa, it's not a choice between stablecoins and other financial tools. It's stablecoins or nothing." —Samora Kariuki, Frontier Fintech
Across Africa, stablecoins are addressing real problems. From asset preservation to driving trade, the adoption of stablecoins is driven by necessity, not by trading and speculation. Here are the most critical use cases based on real demand, along with the companies building to support these use cases.
3.1 Everyday Tools: Savings, Spending, and Credit
In many African countries, inflation, currency depreciation, and limited access to banking services make it exceptionally difficult to establish financial security. Stablecoins provide a more reliable path, becoming a dollar-denominated tool for savings, transactions, and credit.
A. Asset Preservation
In regions where access to dollar banking services is limited, inflation rates are high, and the costs of fiat payment networks are prohibitive or unreliable, stablecoins are increasingly favored. The situation in Africa reflects this, making stablecoins a key tool for protecting savings and maintaining purchasing power, especially in economies where local currencies are continuously depreciating.
Currency depreciation is one of the biggest financial challenges facing African markets. Take the Kenyan Shilling as an example: although Kenya's GDP has doubled between 2008 and 2024, its exchange rate against the dollar has depreciated by 50% since 2021. The contradiction is evident: economic growth is rising, but confidence in the local currency has not strengthened. Similarly, over the past 18 months, inflation and Naira depreciation have been key drivers of stablecoin adoption in Nigeria. The Naira hit an all-time low in February 2024 and has since struggled, further highlighting the demand for stable alternatives.
(Stablecoins: Leapfrogging Africa’s Financial System, Ayush Ghiya and Uchenna Edeoga)
As local currencies continue to depreciate, stablecoins are becoming the preferred hedging tool, providing a more reliable means of wealth transfer and storage. Unlike cash or gold, stablecoins offer a fully digital, widely available payment channel without relying on banks, payment networks, or central banks. They not only hedge against currency fluctuations but also offer higher yields than traditional savings accounts, making them an attractive choice for Africans looking to preserve and grow their wealth. Traditional banks offer low interest rates, while stablecoin savings platforms leverage decentralized finance (DeFi) and cryptocurrency lending models to create higher returns for users.
Currently, dollar-denominated stablecoins are the preferred choice for users in emerging markets. In much of Africa, USDT (based on Tron) has become the de facto digital dollar. Most users acquire stablecoins through centralized custodial applications like Binance, prioritizing speed and liquidity over Western concerns regarding reserves or transparency.
For users facing foreign exchange rationing and 30% inflation, the most important aspect is that it works. Stablecoins help users preserve assets in marginalized areas and save in stable currencies. According to World Bank data, as of 2021, only 49% of people in Africa had bank accounts, but 400 million used mobile payments, and stablecoins can meet user needs in areas where banks cannot.
Platforms like Fonbnk can enable instant top-ups to USDT on basic mobile phones, while Accrue provides a local community agent network for cash access to stablecoins. Nigeria's cryptocurrency platform Busha Earn allows users to save stablecoins at an annual yield of up to 7.5% (far above the rates of most Nigerian banks). The Sub-Saharan Africa region leads the world in DeFi applications, likely due to the growing demand for convenient financial services in the area. This indicates that stablecoins are not merely an alternative; they are crucial for financial stability in areas where traditional systems fail.
This makes stablecoin savings an attractive option—not only because of higher interest rates but also because users can gain returns in addition to the value obtained through hedging against currency depreciation. These factors work together to make stablecoins a powerful tool for wealth preservation and appreciation.
"By converting everyday prepaid payments—mobile data, bank transfers, and mobile payments—into USDT, Fonbnk acts as a stablecoin settlement layer, providing 400 million unbanked and underbanked Africans with a way to hedge against currency depreciation and opening new avenues for savings and credit beyond traditional banking." —Chris Duffus, Founder & CEO, Fonbnk
B. Expanding Access to Credit
Small, medium, and micro enterprises (MSMEs) in Africa face a credit gap of $330 billion, and the lack of banking services has led to an underdeveloped credit system for small businesses, leaving millions of individuals and small companies shut out by banks. In these markets, small businesses are often overlooked by traditional financial institutions due to high collateral requirements, lengthy documentation processes, and a lack of credit history. Difficulty in obtaining affordable upfront capital has led many MSMEs to turn to informal lenders for financing, and the lack of affordable credit limits their ability to maintain daily operations and promote economic growth.
In the Web3 space, stablecoin-based lending protocols have shown great potential in addressing this issue over the past three years. However, most of these solutions still require excessively high collateralization rates, typically about 150% of crypto assets as collateral, which effectively excludes SMEs in emerging markets. While low-collateral lending protocols like Goldfinch have emerged, they primarily act as alternative debt providers for fintech lending institutions rather than directly serving real small businesses.
Recently, two companies, Jia (utilizing decentralized finance to provide factoring, supply chain financing, and other loans) and Haraka (using an innovative social credit system), are actively working to disrupt this space and seize market opportunities in Africa. These companies offer blockchain-based loans to small businesses and empower responsible borrowers with ownership, enabling them to build wealth and drive economic development in their communities.
Bringing this real-world economic activity on-chain benefits both investors and borrowers. Investors can access real returns democratically, while borrowers can gain blockchain liquidity and use ownership as a means to create long-term wealth for themselves and their communities. The use of blockchain also lowers the high transaction costs commonly found in private credit markets (often passed on to the end borrower) and allows borrowers to create on-chain credit records, thus building reputations over time.
These tools give users more control over their funds and unlock previously inaccessible financial options.
3.2 Cross-Border Flow: Trade, Fund Management, and Remittances
As Stripe CEO Patrick Collison stated, stablecoins are the "superconductors of financial services." They will enable businesses to seek new opportunities that traditional payment channels or existing gatekeeper frictions could not bear. This is especially evident in cross-border payments, where traditional systems are slow, expensive, and rely on multiple intermediaries. High fees and long delays complicate transactions—especially in Africa, where the average remittance rate is about 8%, and financial infrastructure is often limited or absent.
Cross-border payments form the backbone of everyday economics in Africa, from importing goods and sending remittances to repatriating profits and paying freelancers. However, the payment channels supporting these flows remain fragile: delays of 3-5 days, fees of 5-10%, and restrictions due to foreign exchange rationing. Stablecoins are changing this reality, providing a solution that supports real-time, low-cost transfers without the need for large capital reserves or bank intermediaries.
(Stablecoins: Leapfrogging Africa’s Financial System, Ayush Ghiya and Uchenna Edeoga)
For the scenario where a user in Uganda wants to transfer funds to a user in Nigeria. If remittances are based on the SWIFT network, users may have to route through a US intermediary due to the lack of direct banking networks between the two countries. However, once a stablecoin payment network is adopted, users can exchange local currency for stablecoins and send them directly to the Nigerian user, who can then exchange them for Nigerian Naira and access funds locally.
This process eliminates inefficiencies in SWIFT and net settlement-based models because transfers are conducted directly through exchanges or blockchain wallets connected to currency acceptance providers. These providers integrate with local payment systems to achieve seamless conversion between stablecoins and local currencies.
Recently, Stripe acquired Bridge, a stablecoin API provider, for $1.1 billion, just two years after Bridge was founded in 2022 to enhance its global stablecoin payment network. Africa is a key market for Bridge, providing stablecoin payment services to most African payment companies operating in Europe, the US, and Asia. This highlights the growing demand for stablecoin infrastructure in the market and the rapid expansion of key players in the field.
While Bridge laid the foundation for the orchestration and issuance of stablecoins, there is still much work to be done in this subfield. Cross-border payments remain a massive opportunity, but there are also some key issues that need to be addressed.
A. Trade and B2B Payments
China is Africa's largest trading partner, with imports from China reaching $176 billion in 2023, resulting in a $66 billion trade deficit. This creates a persistent demand for dollar payments, and stablecoins efficiently meet this demand. With their deep liquidity and widespread exchange support, USDT (based on Tron) has become the preferred channel for many commercial payments.
"Stablecoins are the new cornerstone of cross-border payments in Africa. Businesses can settle payments almost instantly using Conduit, reducing working capital, maintaining liquidity, and avoiding currency fluctuations." —Eric Wainaina, General Manager, Africa at Conduit
"Stablecoins have completely changed the situation for importers who could not obtain dollars through banks—they are now thriving in their businesses." —Suleiman Murunga, Director, MUDA
Intra-African trade payments: Intra-African trade accounts for only 15% of the continent's total imports and exports, far below 54% in North America, 60% in Asia, and 70% in the European Union. The main reason for this imbalance is the lack of direct currency exchange infrastructure—most transactions require converting local currencies into dollars, pounds, or euros before converting to other African currencies. This inefficiency adds an unnecessary cost of $5 billion annually to intra-African transactions. Addressing this issue is crucial for achieving smooth trade across the continent.
Funds Repatriation: Some large multinational companies selling goods and services in Africa can use stablecoins to repatriate funds to their home countries. With stablecoin infrastructure, settlement times for funds are under 30 minutes, while traditional payment methods take 2-3 days.
B. Remittances and Global Payments
Just as stablecoins can facilitate outward payments, they can also bring funds into the African continent. This includes remittances, salary payments, and income for freelancers.
Remittances are one of the most common cross-border payment needs, but traditional remittance methods make it expensive. In 2023, global remittance flows reached $883 billion, with the fees particularly impacting low-income users. Now, the cost of remitting $200 from the US to Nigeria using stablecoins is less than $0.01, while traditional methods require $7.60. Significantly reducing these costs remains a priority.
"Sub-Saharan Africa remains the region with the highest remittance costs globally, averaging 8.37% in 2024. However, many overseas Africans are unaware that they can now use stablecoins to send money home, faster and at lower costs." —Xino Zee, Lead at Send Africa
Payments: For freelancers in the gig economy, cross-border micro-payments remain costly and inefficient. In places like Kenya, some choose to "rent" PayPal accounts because opening an account is too difficult—highlighting how access barriers exacerbate the already high costs of small international payments. The emergence of stablecoins can simplify payment processes, significantly benefiting these workers. Additionally, multinational companies can use stablecoins to efficiently manage cash flow and seamlessly pay global employees, customers, or suppliers.
Global Aid: Currently, for every dollar of donation received by global aid organizations, only about 40 cents ultimately reaches the beneficiaries, while the rest goes to multiple intermediaries. Clearly, we need a more efficient, low-cost system to provide global aid in a transparent and seamless manner.
A wave of new companies is rebuilding Africa's cross-border payment infrastructure around stablecoins. As exchanges, Yellow Card, Busha, VALR, and Luno provide liquidity for local currency acceptance. Conduit, Honeycoin, Shiga Digital, and Juicyway support commercial trade, collections, and payments, while Sling and Send drive consumer P2P payments.
These builders have quietly moved tens of billions of dollars. Many companies do not directly sell "stablecoins", but rather sell cheaper remittances, operating capital efficiency, and currency stability.
IV. Opportunities for Builders in Africa
"In Africa, if you kick a tree, three fintech companies using stablecoins will fall out... The strongest teams we support now have single-channel or industry liquidity—stablecoins are only hidden behind the scenes of fintech companies." —Brenton Naicker, Principal & Head of Growth (Africa) at CV VC
4.1 Four Levers for Creating Value
The first wave of stablecoin growth has concentrated on infrastructure: deposits, channel liquidity, and basic wallet functionalities. This layer is rapidly becoming crowded. The next phase is differentiation: who owns the users, who defines the standards, and how to profit in practical use cases. Here are the four levers shaping value creation across the African continent:
A. Distribution: Winning Users
Control over the user interface and customer relationships determines the flow of transaction volume. The strongest companies are not leading with stablecoin infrastructure, but rather solving payment, lending, or fund management issues, hiding stablecoins behind the scenes.
B. Liquidity: Controlling both ends of the channel
Local foreign exchange liquidity is uneven and difficult to replicate. Teams capable of managing liquidity at the starting and ending points can offer better pricing, internal netting trades, and reduced fees. Liquidity accumulates, forming a defensive moat.
C. Regulation: Shaping the Rules When They Are Not Yet Formed
In competitive markets like Nigeria and Kenya, perfect execution is crucial. However, in less developed markets like Malawi or Cape Verde, early movers face less competition and can collaborate with regulators to define the rules of the game. Builders who invest early in trust may win long-term policy consistency.
"Dollar liquidity has already been tokenized across much of Africa through stablecoins. Policymakers should prioritize the large-scale tokenization of local currencies to accelerate economic sovereignty and trade." —Wale Ayeni, Managing Partner of Helios Digital Ventures
D. Vertical Fields: Tailoring for Specific Workflows
Whether in agriculture (e.g., Agridex), logistics, education, or global aid, each industry has its own workflows, user expectations, compliance requirements, and payment rhythms. Specialized builders are able to use jargon, plug into existing tools, and address issues that generalists cannot solve. Once trust is established, they can add additional financial services such as credit, fund management, or insurance. Focus brings user stickiness and profitability.
4.2 Major Crypto Economies in Africa
(State of Crypto Report 2024: New data on swing states, stablecoins, AI, builder energy, and more)
A. Nigeria—The Center of African Crypto Activity
Driven by a booming fintech sector and severe economic challenges, Nigeria, Africa's most populous country, is at the forefront of stablecoin adoption. In recent years, Nigeria's economy has faced a series of shocks. Low oil prices (a key driver of its export economy), combined with the impacts of the COVID-19 pandemic and supply chain disruptions, have led to prolonged financial uncertainty. Nigeria's inflation rate ranks among the highest in Africa, even exceeding that of the entire Francophone region. As the Naira continues to depreciate, stablecoins have become a crucial tool for Nigerians seeking wealth preservation and global transactions.
In the Chainalysis team’s Global Crypto Adoption Index, the country ranks second overall. From July 2023 to June 2024, the country received approximately $59 billion in cryptocurrency. Nigeria is also one of the major markets for the adoption of mobile crypto wallets, second only to the United States. The country is actively pursuing regulatory clarity, including through incubation programs, and the use of stablecoins in daily transactions (such as bill payments and retail purchases) has significantly increased.
(Sub-Saharan Africa: Nigeria Takes #2 Spot in Global Adoption, South Africa Grows Crypto-TradFi Nexus, Chainalysis)
Like Ethiopia, Ghana, and South Africa, stablecoins are also a significant component of Nigeria's crypto economy, accounting for about 40% of stablecoin inflows in the region—the highest in Sub-Saharan Africa. Nigerian users report higher transaction frequencies and deeply understand that stablecoins are a financial tool, not just an asset class.
Cryptocurrency activity in Nigeria is primarily driven by small retail and professional-scale transactions, with about 85% of remittance values being below $1 million. Due to the inefficiencies and high costs of traditional remittance channels, many Nigerians rely on stablecoins for cross-border remittances. Sodipo points out, "Cross-border remittances are the main use case for stablecoins in Nigeria. They are faster and more affordable."
"Everyday activities such as bill payments, mobile top-ups, and retail shopping are increasingly driven by cryptocurrency. People are starting to see the practicality of cryptocurrency in the real world, particularly in daily transactions, contrasting with the previous view of cryptocurrency as a way to get rich quickly." —Moyo Sodipo, CEO & Co-founder of Busha, Nigeria's cryptocurrency exchange
Beyond the traditional financial system, DeFi platforms are also providing Nigerians with new opportunities to earn interest, borrow, and participate in decentralized trading. Sodipo states, "DeFi is a key growth area, as users are exploring ways to maximize returns and access financial services they may not have been able to before."
(GPR 2025: the past, present and future of payments, WorldPay)
We can see in the above chart that cryptocurrency as a means of payment has captured a 1% share in Nigeria's online E-commerce and offline POS, classified under Digital Payments. Similar countries in the WorldPay report include Argentina, Brazil, India, Nigeria, Philippines, Singapore, and Turkey.
Against the backdrop of inflation, remittances, and financial channels driving stablecoin applications, it is believed that stablecoin adoption will manifest in various scenarios. Nigeria has become an ideal testing ground for stablecoins in Africa. The role the country plays in building stablecoin infrastructure will determine the direction of this technology's development on the continent.
In December 2023, Nigeria's central bank lifted its ban on banks providing services to cryptocurrency companies, which has played a key role in the popularization of cryptocurrency. "Since the lifting of the banking ban, it has opened up many possibilities for collaboration and smoother transactions," Sodipo explained. Building on this, in June 2024, the Nigerian Securities and Exchange Commission (SEC) launched the Accelerated Regulatory Incubation Program (ARIP), requiring all virtual asset service providers (VASP) to register and be evaluated before obtaining full approval. "The industry is optimistic about ARIP; it's a shift away from uncertainty and a positive step towards regulatory clarity," said Sodipo.
These policy initiatives will enable companies across various sectors to consider shifting from traditional payment channels to stablecoin infrastructure. While compliant solutions are not without flaws, every business adopting stablecoins can demonstrate to existing enterprises that stablecoins are a reliable, secure, compliant, and more sophisticated solution to traditional payment problems.
B. South Africa—TradFi Institutional Adoption Drives Market Development
As Africa's largest economy, South Africa has positioned itself as one of the continent's most advanced Web3 markets, with a sophisticated regulatory framework and strong institutional investor interest. The country has become one of Africa's largest cryptocurrency markets, with a trading volume of $26 billion over the past year. Unlike many African nations where cryptocurrency adoption is largely driven by retail investors, South Africa's institutional investor engagement is steadily increasing, with licensed companies and traditional financial institutions entering the space.
Since the end of 2023, stablecoins have been continuously growing on South African local exchanges—with a month-on-month growth of over 50% in October 2023. Stablecoins have surpassed Bitcoin to become the most popular cryptocurrency in recent months.
(Sub-Saharan Africa: Nigeria Takes #2 Spot in Global Adoption, South Africa Grows Crypto-TradFi Nexus, Chainalysis)
The key driver behind the growth of cryptocurrency in South Africa is its clear regulatory stance. The country has classified cryptocurrencies as financial products, creating a structured legal environment that provides a clear regulatory framework for businesses and investors. In March 2024, South Africa approved 59 cryptocurrency operation licenses, paving the way for broader adoption of stablecoins. By setting regulatory guardrails, the government aims to attract investment, protect users from cybercrime, and expand channels for low-cost digital asset trading.
The South African government's interdepartmental fintech task force is actively refining its regulatory approach to stablecoins and plans to formally classify stablecoins as a unique subset of crypto assets. This move aligns with the country's broader financial modernization and digital payment initiatives, aimed at ensuring stablecoins can be properly integrated into the financial ecosystem. The 2024 budget review further emphasizes the government's commitment to structural reforms, improving public financial management, and developing new policies focused on stablecoins and blockchain-based digital payments.
The growing interest from institutional investors has also sparked discussions around banks issuing stablecoins. As traditional financial institutions explore stablecoin models, South Africa may soon see regulated, bank-supported digital assets, which will further drive the mainstream application of stablecoins. Led by startups like VALR, Luno, and Altify, South Africans have begun using stablecoins to diversify investments, make payments, and access financial services more efficiently.
With a developed financial sector, clear regulations, and the increasing integration of cryptocurrencies with traditional finance, South Africa is becoming a leader in the application of stablecoins on the continent. As the government refines its policy framework and institutions get more involved, South Africa is laying the groundwork for stablecoins to play a core role in its evolving digital economy.
C. Kenya—Becoming the Stablecoin Hub of East Africa
Kenya has long been at the forefront of financial innovation in Africa. From being the first to launch mobile money to early adoption of Web3, the country continues to leapfrog the traditional banking system in favor of more efficient digital solutions. Today, Kenya is positioning itself as a key player in the stablecoin revolution, leveraging its robust fintech infrastructure, open regulatory environment, and growing demand for alternative financial services.
One of Kenya's biggest advantages is its deep-rooted mobile money culture. M-Pesa, launched by Safaricom in 2007, has become a pillar of Kenya’s financial system, handling about 60% of the country's GDP and covering over 90% of adults. Its success lies in providing banking services without physical banks, allowing millions of Kenyans to deposit, withdraw, transfer, and even obtain credit via mobile devices. Stablecoins complement this ecosystem, enabling users to hold value in stable currencies and transact seamlessly on a global scale.
In addition to mobile money, Kenya's regulatory environment has been a significant driver of fintech and Web3 development. Unlike many countries that take a restrictive stance on digital assets, the Capital Markets Authority (CMA) of Kenya actively promotes innovation through regulatory sandboxes, allowing blockchain-based companies to test and refine their products.
Kenya's demand for stablecoins stems from its lack of formal financial services. SMEs (Small and Medium Enterprises) face significant barriers to credit; in 2021 alone, Kenyan businesses sought approximately $1.1 billion in loans. Stablecoin-driven loan solutions can fill this gap, providing businesses and individuals with cheaper, faster, and more convenient credit options.
Kenya has also become a global leader in the tokenization of private credit. According to data from RWA.xyz, Kenya ranks first globally in the tokenization of real-world asset lending, with a loan amount of $73.8 million, surpassing larger economies like India and Brazil. This not only reflects a strong demand for alternative financing solutions in Kenya but also demonstrates the country's ability to integrate blockchain-based credit models into its financial ecosystem.
With a mature mobile currency landscape, advanced regulatory bodies, and the increasing adoption of stablecoin applications, Kenya is rapidly becoming an important stablecoin hub in East Africa. As more fintech companies build stablecoin-based solutions, Kenya's role in shaping the financial future of the region will continue to strengthen.
(Nika, photographed in downtown Kenya, May 2025)
V. Adoption Barriers to Overcome
Although we can see robust progress from numerous builders in Africa's ideal testing ground, stablecoin infrastructure still faces structural challenges. To expand further, builders must tackle tough obstacles, some of which are technical, while others are political.
5.1 Policy Risks and Regulatory Ambiguity
While the largest countries have made regulatory progress, most others remain in a regulatory gray area. Stablecoins are neither banned nor fully legalized, slowing the pace of enterprise adoption and hindering the entry of institutional capital.
As transaction volumes grow, enforcement may increase in terms of capital controls, taxation, anti-money laundering, and reporting. Progress in this area will come from positive interactions with regulators. Founders, industry associations, and regional sandboxes can help shape the rules.
"Busha is proud to be the first licensed exchange in this market, and we are leading this transformation by providing the necessary liquidity, trust, and infrastructure to drive a stablecoin-powered economy. This is not the future; it has already arrived." —Michael Adeyeri, Co-Founder & CEO of Busha
5.2 Monetary Sovereignty
Governments are increasingly concerned that stablecoin wallets are creating a "shadow dollar economy." Some countries are exploring local alternatives such as ZARP (Zimbabwe Digital Asset Reserve Platform) and cNGN (Naira-backed stablecoin), or piloting Central Bank Digital Currencies (CBDC) to maintain monetary control.
"The dominance of dollar stablecoins reflects a crisis of trust... Without decisive policy innovation and encouragement for regulated and competitive Naira-backed stablecoins like cNGN, African nations may relinquish their financial control to offshore stablecoin issuers." —Adedeji Owonibi, Founder & COO of Convexity (cNGN Issuer)
5.3 Liquidity Gap
Rapid cross-border payments require that capital be available in the right time, place, and currency. Providers like Wise and Thunes address this issue through pre-funded accounts, but with the liquidity of stablecoins, this responsibility shifts to market makers, over-the-counter desks, and other liquidity providers. As transaction volumes grow, capital remains a limiting factor in each channel.
Payment finance companies like MANSA and Arf are filling this gap. By using stablecoins as a transmission layer, they provide real-time liquidity to fintech companies, coordinators, and SMEs.
"Real-time, low-cost liquidity not only makes payments faster but also unlocks new models, such as timely supplier financing. For founders who have built businesses around settlement risk, this is a game changer.
The next step is to embed this dollar liquidity directly into applications and tools that emerging market businesses are already using, allowing value to flow as easily as WhatsApp messages." —Mouloukou Sanoh, CEO & Co-Founder, MANSA
5.4 Fraud, Scams, and Consumer Trust
The adoption of cryptocurrency brings new risks, from phishing scams and counterfeit wallets to poorly secured applications. These vulnerabilities undermine user trust, especially among first-time users. The responsibility for ensuring security lies with consumer applications. Trustworthy design, risk tools, and education must be integral parts of core products.
"Users are the biggest victims of malicious acts. Users will only continue to use and recommend platforms that they believe are safe." —Zach Bijesse, CEO & Co-Founder at Archer
5.5 Awareness and Education
Outside of the cryptocurrency-native circles, many merchants and agents still find stablecoins difficult to understand. Ongoing "last mile" adoption depends on usability, training, and demonstrating real value.
"In many rural areas and even urban communities, awareness of cryptocurrency remains low because it seems too technical." —Xino Zee, Lead at Send Africa
These obstacles are real, but they are gradually being overcome every day. Successful teams do not wait for perfect conditions; they build resilience, earn trust, and adapt to various channels and communities as regulations improve.
Six, Stablecoins are Redefining Finance in Africa
Stablecoins are fundamentally changing the financial landscape in emerging markets by providing a convenient, efficient, and reliable alternative to traditional banking systems. Unlike the institution-driven adoption seen in Western economies, Africa has not waited for a global consensus on stablecoins but has already begun building. Emerging markets like Sub-Saharan Africa are experiencing grassroots growth driven by retail users participating in small remittances, payments, and value storage, while practical applications in remittances, trade, credit, and savings are being driven by fintech companies.
The experiences of the past few years have shown that stablecoins are not just an alternative; they are an inevitable trend for the future of African currencies. They can bypass broken financial rails, provide stable value, and enable instant, low-cost transactions, making them important tools for individuals, businesses, and even institutions. As more infrastructure is built and regulatory transparency improves, stablecoins will become even more deeply integrated into Africa's financial system.
Here is the prototype of the future of programmable money. This is a region worth learning, building, and investing in.
We are creating a series of documentaries to tell these stories—the stories of humans using stablecoins at the last mile—because to fully realize the opportunities of stablecoins, we need to better understand the conditions driving stablecoin development and continue to push for their adoption in markets where this technology has found product-market fit. —Justin Norman, Founder of The Flip
He pointed out that understanding stablecoin adoption in Africa requires seeing the "last mile" individuals, not just the technology.
Africa's demographic structure is in place, and demand is evident. As global regulations gradually improve, this momentum will only accelerate. Stablecoins are no longer just a buzzword in the crypto market, but a systemic-level transformation decoupling from traditional finance and reconstructing on-chain.
Everyone sees different facets, but they all point to the same future—a world where banks are not necessary, yet everyone can 'have a bank.'
Focus on the market: The payment track has always been a market where Web3 has thrived, including leading projects like XRP and TON. If full-scale adoption really happens, how do you think you'll make money in it?
#payfi #payment #币安Alpha上新