Stablecoins have emerged as essential financial resources which African nations utilize for international money transfers and their citizens’ saving needs. Vera Songwe, an economist, explained at the World Economic Forum in Davos that African economies currently depend more on remittances than on foreign aid.
The traditional money transfer system requires users to pay a $6 fee for every $100 transferred while they need to wait several days until their funds arrive. Stablecoins enable users to transfer money within minutes at reduced expenses which assist families and small businesses in their everyday operations and international business activities.
Why stablecoins are filling the gap
Songwe said inflation has exceeded 20% in roughly 12 to 15 African countries since the COVID-19 pandemic. People in this situation use stablecoins because they want to protect their assets from rising local inflation rates.
She mentioned that 650 million people in Africa lack access to basic banking services. People can use their smartphones to store and transfer stablecoins because they do not need conventional banking systems. Songwe states that people use stablecoins most frequently in Egypt, Nigeria, Ethiopia and South Africa because those countries experience strong inflation pressures and capital control measures. The higher financial activity from small and medium-sized businesses demonstrates their essential contribution to improving financial access for all.
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Regulation now begins to catch up with emerging developments.
The rate of cryptocurrency adoption across Africa currently experiences rapid growth. According to a September report from Chainalysis Sub-Saharan Africa received over $205 billion in on-chain value between July 2024 and June 2025 which represents a 52% increase from the previous year and ranks as the third highest total worldwide.
Different governments choose to respond through various methods. Ghana established legal cryptocurrency trading through a new law that provides operational rules for service providers which the country enacted in December.
Nigeria introduced requirements in January for crypto firms to link transactions to users’ tax identification numbers. The central bank of South Africa issued a warning to its citizens about the financial stability risks which crypto assets and stablecoins present as their usage continues to grow.
