From Lagos to Joburg: Stablecoins are the new trade currency

When a Nigerian shoe trader needs dollars, she no longer heads to the bank. Instead, she buys USDT, a dollar-backed stablecoin, and sends it to her supplier, who accepts it or converts it to yuan. It’s a seismic shift across the continent, with stablecoins emerging as the region’s new settlement currency.

The timing could hardly be more significant. In July, US President Donald Trump signed the Genius Act into law, creating America’s first comprehensive framework for stablecoins. For African businesses already relying on digital dollars to move goods and pay suppliers, the move offers both reassurance and a warning: global standards are being established, and local regulators will either align with them or risk being sidelined.

Chris Maurice, chief executive officer and co-founder of Yellow Card, the pan-African and emerging markets stablecoin company, says the fastest adopters are not speculators but businesses struggling with day-to-day cross-border payments.

“Moving money across borders in Africa, Southeast Asia, and South America is extremely difficult. Legacy systems just don’t work,” he tells Currency. “Whether you’re an informal trader moving a few thousand dollars or a pharmaceutical importer shifting $1m a day, stablecoins solve the same problem: access to dollars and faster settlement.”

The use cases are multiplying. Airlines are paying suppliers, manufacturers are hedging foreign exchange exposures and informal traders are keeping supply chains alive. According to Chainalysis, Sub-Saharan Africa processed more than $54bn in stablecoin transactions between July 2023 and June 2024, accounting for 43% of all cryptocurrency activity in the region. Nigeria alone has an estimated 25.9-million digital asset users, the second-highest adoption rate globally.

South Africa, meanwhile, is leading in institutional interest. Absa has explored stablecoins for liquidity and forex hedging, while fintech platforms such as TransFi are linking USDC and USDT to traditional banking payment infrastructure or networks for remittances and payrolls. At least six rand-backed projects are live, though issuers operate outside the formal prudential net.

Maurice believes the real inflexion point is trust. The collapse in November 2022 of FTX, once one of the world’s largest cryptocurrency exchanges, highlighted the risks associated with unregulated platforms. The firm buckled after it was revealed that customer funds had been secretly diverted to cover losses at a sister trading firm. The bankruptcy exposed massive fraud and mismanagement, leading to criminal charges against founder Sam Bankman-Fried, who has since been convicted of fraud and conspiracy.

FTX was likely a temporary stumble, however. “Everything is going to move on-chain,” he says. “Big banks like Citi and JPMorgan are already investing heavily. For African companies, the question is not whether to adapt, but how quickly.”

Nigeria’s central bank has positioned its cNGN stablecoin as a tool to modernise payments while keeping oversight local. Kenya’s Capital Markets Authority has stated that its proposed legislation is designed to strike a balance between innovation and consumer protection. In South Africa, the Reserve Bank has warned that stablecoins raise “financial stability implications” and is assessing whether prudential rules should be extended to issuers.

No choice but to adapt

The stakes are not abstract. High remittance fees, persistent dollar shortages, escalating foreign exchange spreads and slow correspondent banking channels have long stifled African trade. Stablecoins offer businesses a way around these chokepoints, but without clear rules, they could also deepen the risks of illicit flows and dollarisation.

For corporates, pragmatism trumps geopolitics. Maurice argues that businesses are adapting because they have no choice but to do so. “Stablecoins are the first real solution – and they’re not waiting for regulators to catch up.”

The economic implications are significant. Remittances, which account for more than 3% of Sub-Saharan Africa’s GDP, are among the most expensive in the world to process through traditional channels. Stablecoins could cut costs by as much as half, while enabling near-instant settlement. They could also underpin the African Continental Free Trade Area, where 54 member states are seeking to integrate payments and boost intra-African commerce.

The opportunity is enormous.

“There’s so much growth happening on the continent,” Maurice says. “Africa is the fastest-growing region in terms of adoption, and in absolute numbers it’s one of the largest in the world. As the space develops, you’ll see increasing concentration here and in other emerging markets, where the need for this technology is most pronounced.”

Still, the risks are real. Dollarisation could deepen, leaving countries more exposed to US monetary policy. Illicit flows remain a concern, especially in fragile states with weak oversight. And without clear prudential standards, businesses relying on non-bank issuers could face sudden losses if reserves are mismanaged. The FTX collapse served as a cautionary tale of what happens when regulation lags innovation.

For policymakers, the challenge is to harness the upside without repeating those mistakes. Some governments, such as Ghana’s, are signalling readiness to regulate by year-end. Others are dragging their feet, caught between enthusiasm for innovation and fear of destabilising fragile currencies. 

“As long as regulation keeps up, I see no reason Africa will fall behind,” says Maurice. “Businesses have been struggling with these problems for years, and now they finally have a solution. Most regulators are working on it – the question is how quickly.”

_{Top image: Rawpixel/Currency collage.}