Stablecoins Gain Ground In Africa As Remittances Outpace Aid, Ex-UN Official Says

Forget aid packages—Africa's real financial revolution is happening peer-to-peer. Stablecoins are cutting through borders, bypassing banks, and rewriting the continent's economic playbook.

The Remittance Revolution

Traditional development aid is getting lapped by digital cash flows. Former UN officials point to a seismic shift: remittances sent via stablecoins now dwarf official assistance. It's a grassroots financial takeover, powered by phones instead of policy papers.

Why Stablecoins Win

Speed kills bureaucracy. A stablecoin transfer settles in minutes, not days. Costs plummet when you cut out the middlemen. For families across Africa, this isn't just convenience—it's survival economics. Volatility? Pegged assets laugh at local currency swings.

The Infrastructure Gap

Legacy finance never built the rails here. Mobile penetration did. Now, a smartphone and internet connection are the only gateways needed. Traditional banks—with their branches and paperwork—are watching from the sidelines as digital wallets eat their lunch.

A New Financial Architecture

This isn't just about moving money. It's about building parallel systems. Savings, loans, and micro-economies are emerging on blockchain backbones. The old guard's aid complex looks increasingly like a slow, expensive relic. (The cynical take? Traditional finance always priced frontier markets as 'high risk'—turns out the real risk was their own obsolescence.)

The bottom line: When people choose code over corridors of power, you're witnessing more than a trend. You're watching a financial system being born—and it doesn't need anyone's permission to grow.

Use By Businesses And Everyday People

Reports have disclosed that stablecoins now make up around 43% of all crypto transaction volume in sub-Saharan Africa. Nigeria alone processed nearly $22 billion in dollar-linked stablecoin activity over a recent 12-month span.

That money is used for remittances, payroll and business settlements. Firms and market traders are among the biggest users, but many everyday people are joining in too.

In countries such as Egypt, Nigeria, Ethiopia and South Africa, demand is driven by volatile local currencies and rules that limit access to dollars. Mobile money networks help push adoption along.

Traditional remittances can be costly. At a World Economic Forum panel in Davos, Switzerland on Thursday, Songwe noted that sending $100 through traditional money transfer services in Africa often costs around $6, making cross-border payments both slow and costly.

Stablecoins cut those costs and shorten wait times from days to minutes for many transfers. Small payments and wages can be settled quickly, and that speed changes how businesses plan cash flow.

Governments are reacting in different ways. Ghana passed a Virtual Asset Service Providers law to bring trading into a formal framework. On January 13, Nigeria required crypto platforms to LINK transactions to tax ID numbers, a move meant to bring activity into official records.

South Africa’s central bank has warned that stablecoins and other tokens could pose risks to financial stability as use grows. Policy is being written while users and tech firms keep pushing ahead.

High inflation remains a Core reason people are turning to stablecoins. Reports say inflation has exceeded 20% in 12 to 15 countries since the pandemic, and that reality pushes people to look for alternatives to local notes.

What started as a tech niche has grown into a practical tool for many across the continent. For small and medium businesses, the benefit is clear: faster settlements and lower costs.

For people without bank accounts, a smartphone can now open a route to store value in currencies less tied to local inflation. Adoption will likely keep rising, but how quickly it becomes part of mainstream finance will depend on stronger rules, better safeguards, and the continued spread of simple mobile services that people trust.

Featured image from Unsplash, chart from TradingView