Stablecoin adoption is surging across Africa as both businesses and consumers find use cases that assist in speeding up and lowering the cost of transacting.
Speaking in a webinar hosted by Absa Corporate and Investment Banking (CIB) on Tuesday, Lasbery Oludimu, MD of US-headquartered fintech and cryptocurrency exchange Yellow Card, said stablecoin growth is being driven by several factors, all linked to solving problems that the traditional financial system has failed to address adequately.
“Stablecoins are taking off in Africa because they help solve some of the problems we cannot solve using the traditional financial system,” said Oludimu.
“A good example of this is currency volatility. We know how volatile some of our currencies have been in the last two to four years. This means we need an alternative that is better at holding value in a more stable form – and that is where stablecoins come in.”
Currency volatility has been dampener of economic growth for several major African economies in recent years. Most prominent has been Nigeria, which suffered an almost 70% decline in the value of the naira following a move to a market-determined exchange rate in 2023. Other currencies that have experienced severe fluctuations in the value of the currency include the Kenyan shilling, the Ethiopian birr and the Egyptian pound.
Currency devaluations have an impact on inflation. Also affected are multinational companies, which can lose value by injecting capital into markets when the local currency is strong only to repatriate earnings when it’s weakened. An example of this has been MTN’s experience in Nigeria. “Keeping savings in dollar-pegged stablecoins has allowed businesses and consumers to protect the value of their earnings,” said Oludimu.
Paying their way
A second factor driving stablecoin adoption is foreign currency scarcity, which Oludimu said has a particular impact on import-focused businesses in some African markets, with operations sometimes impacted by an inability to pay suppliers timeously.
“Say you are an importer with goods abroad you need to pay for. You could go to the bank and find you cannot make a payment for up to a week due to a lack of foreign currency. People are now using stablecoins to pay for their obligations abroad,” said Oludimu.
Read: Heavyweights backing ZARU, a new rand-based stablecoin
Aside from their stability next to more volatile forms of cryptocurrency, like bitcoin, stablecoins are gaining traction because of the speed at which transactions are facilitated on the blockchain. This, along with the lower cost of cryptocurrency transactions, has had a strong impact on the remittances market, the third area driving higher stablecoin adoption across Africa.
Financial institutions are awake to the impact that the adoption of stablecoins and other cryptocurrencies could have on their businesses. Robert Downes, head of digital assets at Absa CIB, said banks are actively partnering with crypto exchanges to see how their services can be augmented using stablecoins and blockchain technologies.
Despite all the factors driving stablecoin adoption in Africa, financial regulators have raised concerns about the risk they pose to fiscal stability. In its Financial Stability Review in November, the South African Reserve Bank said one of the key transmission mechanisms through which crypto assets can impact financial stability is through their use in payments and settlements. The Bank added that since crypto payments are borderless, they present an avenue for circumventing exchange controls. – © 2026 NewsCentral Media
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