Stablecoins Gain Ground in Africa as Inflation and Remittance Costs Rise

Stablecoin adoption is rising across Africa as individuals and businesses search for faster cross-border payments and protection from rising prices. Speaking at the World Economic Forum in Davos, economist Vera Songwe said stablecoins are filling gaps left by costly remittance systems and weak local currencies. Growing usage is also drawing closer attention from regulators across the continent.

Stablecoins Fill Remittance Gaps as Inflation Erodes African Savings

Addressing a panel in Davos on Thursday, Songwe said remittances now play a larger role in African economies than foreign aid. Yet sending money across borders remains expensive. Many traditional transfer services charge around $6 per $100 sent, and settlement can take several days. 

But stablecoins, on the other hand, allow funds to move within minutes at a far lower cost. And this helps families and small firms manage cash flow more efficiently.

Songwe said inflationary pressures since the COVID-19 pandemic have further driven adoption. Prices have risen by more than 20 % in roughly 12 to 15 African countries, eroding household savings and business capital. 

Holding stablecoins gives users a way to store value without exposure to rapid depreciation of local currencies. For many, mobile access alone is enough to join the digital economy.

Capital Controls Push Africa’s SMEs Toward Stablecoins

During the discussion, Songwe stressed how access and usage break down across the continent :

• About 650 million Africans remain outside the formal banking system.
• Smartphones often provide the first point of entry to digital finance.
• Stablecoins allow savings in currencies less affected by local inflation.
• Small and medium-sized enterprises drive a large share of transactions.
• Remittances and trade payments dominate everyday use cases.

According to Songwe, activity is strongest in Egypt, Nigeria, Ethiopia, and South Africa. Each faces a mix of high inflation, currency pressure, or strict capital controls. Use by small businesses suggests stablecoins are serving daily commercial needs rather than short-term speculation. 

Songwe chairs the Liquidity and Sustainability Facility and is a senior fellow at the Brookings Institution. She previously served as a UN under-secretary-general and led the UN Economic Commission for Africa.

Sub-Saharan Africa Ranks Among Fastest-Growing Crypto Regions, Chainalysis Says

September report from Chainalysis found Sub-Saharan Africa to be among the fastest-growing crypto regions globally. On-chain value received in the region exceeded $205 billion between July 2024 and June 2025, marking a year-over-year increase of about 52% and placing it third worldwide.

Government responses, however, vary widely. In South Africa, the central bank has warned that crypto assets and stablecoins may pose financial stability risks as adoption rises. Nigeria introduced new rules in January requiring crypto platforms to link transactions to tax identification numbers, aiming to bring activity into the tax system. 

Meanwhile, Ghana legalized crypto trading in December through new legislation. Bank of Ghana Governor Johnson Asiama said the framework allows innovation while providing authorities with tools to manage risk.