Africa Turns to Stablecoins for Faster, Cheaper Remittances
Stablecoins are emerging as a critical remittance tool across Africa, delivering faster settlement, lower fees and a hedge against high inflation and weak local currencies. At a Davos panel, former UN under‑secretary‑general Vera Songwe said traditional remittance costs can be about $6 per $100, while stablecoins enable transfers in minutes and allow smartphone users without bank accounts to preserve value. Adoption is strongest in Egypt, Nigeria, Ethiopia and South Africa; a report shows Africa leads global stablecoin adoption at 9.3%, with Nigeria ranked first (25.9 million users, ~12% of the population). Sub‑Saharan on‑chain transactions reached over $205 billion from July 2024 to June 2025, a 52% YoY rise. Regulatory responses vary: Ghana legalized crypto trading via its VASP bill in December, Nigeria now links crypto transactions to tax IDs (rules from Jan 13), and South Africa flags crypto and stablecoins as financial‑stability risks even as use grows. For traders, the trends point to rising on‑chain volume, growing fiat‑crypto rails in Africa, and increased regulatory scrutiny — factors likely to influence liquidity, regional stablecoin demand, and volatility in related markets.
Bullish
Growing stablecoin use in Africa increases on‑chain volumes, expands fiat‑crypto rails and creates steady demand for stablecoin liquidity — all bullish signals for crypto markets, especially for stablecoin issuers and exchanges serving African corridors. Faster, cheaper remittances lower frictions and can pull more capital into crypto rails from remittance flows, supporting trading volumes and market depth. Regulatory moves that legalize or formalize crypto (Ghana’s VASP law, Nigeria’s tax‑ID rules) tend to reduce uncertainty and bring more activity on‑chain, which is constructive for adoption and liquidity. Short term, expect localized volatility as rules are implemented and compliance costs shift flows; arbitrage and on‑chain volume may spike. Long term, greater stablecoin adoption as a payments and savings tool should increase baseline demand for stablecoins and services that convert between fiat and crypto, supporting exchanges, stablecoin projects and payment rails. Risks: tighter regulation in some jurisdictions (e.g., South Africa’s financial‑stability concerns) or adverse enforcement could temporarily depress local activity. Historical parallels: remittance-driven crypto growth in Latin America and the Philippines boosted local stablecoin and exchange volumes and was net positive for market activity. Overall, net effect is bullish but contingent on regulatory execution and custodial/legal clarity.