Stablecoins Gain Traction in Africa as Remittance Costs Soar

Africa's remittance market is undergoing a digital transformation as stablecoins emerge as a cost-effective alternative to traditional money transfers. At the World Economic Forum in Davos, Vera Songwe highlighted how cross-border payments on the continent face fees as high as 6% per transaction. Stablecoins are cutting these costs dramatically while reducing settlement times from days to minutes.

With inflation exceeding 20% in nearly 15 African nations post-pandemic, stablecoins offer financial stability for the unbanked. Over 650 million Africans lack bank accounts, but smartphone access enables dollar-pegged crypto adoption. Egypt, Nigeria, Ethiopia and South Africa lead this shift, particularly among small businesses using stablecoins for daily operations.

Songwe, former UN Economic Commission for Africa head, notes these digital assets now function as tools for broad financial inclusion. The trend underscores Africa's accelerating pivot toward decentralized finance solutions amid currency volatility and restrictive capital controls.