Adoption of stablecoins is increasing across Africa as individuals and businesses seek faster cross-border payments and protection against rising prices. At the World Economic Forum in Davos, economist Vera Songwe said stablecoins fill the gaps left by costly remittance systems and weak local currencies. The growing use is also drawing increased attention from regulators on the continent.
In brief
- Rising inflation and weak local currencies are pushing African households to adopt dollar-indexed stablecoins.
- High fees for remittances and long settlement times make stablecoins attractive for cross-border payments.
- Small and medium-sized businesses are driving the everyday use of stablecoins for commerce and remittances in Africa.
- A report from Chainalysis shows that sub-Saharan Africa is one of the fastest growing crypto regions in the world this year.
Stablecoins fill remittance gaps as inflation erodes African savings
At a panel in Davos on Thursday, Songwe said remittances now play a bigger role in African economies than foreign aid. However, sending money abroad 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 be transferred in minutes at a much lower cost. And it helps families and small businesses manage their cash flow more effectively.
Songwe said inflationary pressures since the COVID-19 pandemic have further driven adoption. Prices have increased by more than 20% in around 12 to 15 African countries, eroding household savings and business capital.
Holding stablecoins pegged to major currencies provides users with a way to retain value without being exposed to the rapid depreciation of local currencies. For many, mobile access alone is enough to join the digital economy.
Capital controls push African SMEs towards stablecoins
During the discussionSongwe highlighted how access and usage is distributed across the continent:
- Around 650 million Africans remain outside the formal banking system.
- Smartphones often represent the first entry point into digital finance.
- Stablecoins allow you to save in currencies less affected by local inflation.
- Small and medium-sized businesses account for a large share of transactions.
- Remittances and commercial payments dominate everyday use cases.
According to Songwe, activity is strongest in Egypt, Nigeria, Ethiopia and South Africa. Each of these countries faces a mix of high inflation, currency pressures or tight capital controls. Usage by small businesses suggests that stablecoins serve everyday business 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 UN Under-Secretary-General and headed the UN Economic Commission for Africa.
Sub-Saharan Africa Among the Fastest Growing Crypto Regions, According to Chainalysis
A September report from Chainalysis revealed that sub-Saharan Africa is one of the fastest growing crypto regions in the world. The value of on-chain transactions received in the region has exceeded 205 billion dollars between July 2024 and June 2025marking an annual increase of approximately 52% and ranking third globally.
However, government responses vary widely. In South Africa, the central bank has warned that crypto assets and stablecoins may pose risks to financial stability as adoption grows. Nigeria introduced new rules in January requiring crypto platforms to link transactions to tax identification numbers, in order to integrate this activity into the tax system.
Separately, Ghana legalized crypto trading in December through new legislation. Bank of Ghana Governor Johnson Asiama said the framework enables innovation while providing authorities with the tools to manage risks.
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