Stablecoins make up 43% of Africa’s ‘crypto’ transactions in 2024

Stablecoins have become the lifeblood of Africa’s digital asset revolution, and in 2024, they accounted for nearly half of all digital currency transactions, a new report has revealed.

The State of Stablecoins report by Yellow Card exchange revealed that stablecoins have recorded explosive growth in Sub-Saharan Africa, where their use cases have expanded rapidly beyond the digital currency ecosystem into payments and cross-border transfers.

Last year, stablecoins accounted for 43% of all digital asset transactions in the region. Nigeria dominated the market with over $22 billion worth of stablecoin transactions at that time, and its overall market value hit $59 billion. The West African nation remains Africa’s largest digital asset market and a global leader too—in the Chainalysis adoption report last year, only India ranked higher.

While Nigeria leads, South Africa is recording the highest stablecoin growth. The report revealed that since October 2023, the country has recorded an average of 50% month-on-month growth in stablecoin volumes, making these tokens the most popular digital asset. South Africa is currently home to nearly 6 million stablecoin holders.

Ghana, Kenya, Zambia, and Ethiopia are the other countries where stablecoin growth has accelerated in the past year.

Beyond powering a rapidly growing digital currency exchange sector, stablecoins are most popular in trading, Yellow Card says. African businesses use them for liquidity and treasury management, enabling efficient settlement in Africa’s disparate and fragmented financial sector.

“Many businesses use stablecoins as a reliable medium for managing liquidity, ensuring they can quickly convert funds between currencies without exposure to extreme fluctuations,” the report said.

Intra-African cross-border transfers remain notoriously expensive and have been cited as one of the biggest impediments to regional trade. As Benedict Oramah, the President of the Africa Export Import Bank, put it: “…it is easier for a bank in an African country to finance trade with a European counterparty than with its neighbors.”

The main reason these payments remain complex and expensive is that they are settled in U.S. dollars and are routed through Europe or the U.S. According to the International Monetary Fund (IMF), only 12% of intra-African payments are fully processed on the continent.

Stablecoins solve this challenge by bypassing the traditional forex market and “reducing the risks and inefficiencies of multiple currency conversions,” the report says.

Catalyst for Africa’s development

Stablecoins are also gaining interest as a hedge against currency volatility, says Yellow Card’s regional manager for East Africa, Sharon Tum. Between 2020 and early 2024, Zimbabwe’s dollar lost over 75% of its value against the U.S. dollar, while the Sudanese pound has lost over 80%. Even Nigeria’s naira has lost over three-quarters of its value in the past five years.

For Africa, stablecoins present a golden opportunity to rethink the regional movement of value, industry leaders say.

“If managed judiciously, stablecoins could serve as a catalyst for [Africa’s] transformation into a blockchain-powered financial hub,” commented Lasbery Oludimu, Yellow Card’s managing director for Nigeria.

In its report, Pan-African VC fund Tekedia Capital hailed stablecoins as “a lifeline” for millions of Africans.

“From powering remittances and trade to accelerating financial inclusion, their adoption is reshaping how individuals and businesses transact, not only across Africa but around the world.”

Still, Africa overwhelmingly relies on Western solutions in the stablecoin world, with USDC and USDT dominating the sector. This is gradually changing, with solutions like Nigeria’s cNGN and AfriqCoin by African digital payments giant OnAfriq offering localized solutions for millions across the continent.

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