Africa’s Largest Economies Champion Stablecoin Adoption for Revenue Growth: Survey Insights

Introduction: The Digital Currency Frontier in Africa

A significant financial shift is underway across the African continent, with its two largest economies, Nigeria and South Africa, emerging as unlikely pioneers in the global stablecoin movement. A comprehensive new survey reveals that users in these nations are not only the most enthusiastic about stablecoins but are also actively leveraging them as powerful tools for revenue generation and circumventing traditional financial hurdles. This trend highlights a profound divergence from global patterns, where stablecoin usage is dominated by crypto trading. In Africa, the narrative is increasingly about practical utility, financial inclusion, and addressing systemic inefficiencies in cross-border payments and domestic monetary systems. This article delves deep into the findings of the pivotal Stablecoin Utility Report, unpacking the drivers behind this adoption, the palpable concerns from monetary authorities, and the realistic pathways for broader integration into everyday economic activity.

Key Points: The African Stablecoin Landscape at a Glance

Before a detailed analysis, it is crucial to distill the core findings that define the current African stablecoin ecosystem:

• Leadership in Adoption & Intent: Nigeria and South Africa demonstrate the highest rates of stablecoin ownership globally (nearly 80% of surveyed crypto holders) and the strongest intent to increase holdings, with over 75% planning to do so.
• Demand for Payment Utility: A striking 95% of Nigerian respondents prefer receiving payments in stablecoins over the local Naira, signaling a deep-seated demand for a more stable and efficient medium of exchange.
• Primary Use Case Divergence: While globally ~90% of stablecoin transactions fuel crypto trading, African users exhibit a stronger, growing desire to use them for everyday payments, subscriptions, and remittances, though retail acceptance remains a major bottleneck.
• Drivers of Growth: The adoption is fueled by the high cost, slowness, and unreliability of traditional banking and remittance corridors, particularly for cross-border transactions within Africa and to the diaspora.
• Regulatory Caution: Central banks, notably the South African Reserve Bank, acknowledge potential benefits (like cheaper remittances) but warn of significant risks to monetary policy, financial stability, and the threat of dollarization.
• Barriers to Mass Adoption: Limited point-of-sale and online merchant acceptance, regulatory uncertainty, and user education are the primary obstacles preventing stablecoins from becoming a mainstream payment method.

Background: Understanding Stablecoins and Africa’s Financial Context

What Are Stablecoins and Why Do They Matter?

Stablecoins are a class of cryptocurrencies designed to maintain a stable value by being pegged to a reserve asset, typically a fiat currency like the U.S. dollar (USD). The most prominent examples, Tether (USDT) and USD Coin (USDC), are pegged 1:1 to the USD. Their primary value proposition is to combine the transactional benefits of cryptocurrencies—speed, global reach, and lower fees—with the price stability necessary for everyday commerce and as a store of value. This stands in contrast to volatile assets like Bitcoin.

Africa’s Unique Financial Infrastructure Challenges

To understand the African fervor for stablecoins, one must contextualize it within the continent’s financial landscape:

• High Remittance Costs: Africa is the most expensive region to send money to, with average costs exceeding 7% (compared to a global average of ~6.5%). Sending $100 to neighboring Mozambique can cost up to $30, as noted by South African Reserve Bank Governor Lesetja Kganyago.
• Currency Volatility and Inflation: Several African currencies, including the Nigerian Naira and South African Rand, have experienced significant depreciation and high inflation, eroding purchasing power and driving demand for more stable stores of value.
• Banking Inclusion vs. Access: While mobile money platforms like M-Pesa have dramatically improved financial inclusion, access to seamless, low-cost international banking and foreign exchange remains poor for individuals and SMEs.
• Fragmented Payment Systems: Cross-border payments within Africa are often slow, requiring multiple hops through correspondent banks, and are burdened with high fees and poor exchange rates.

Stablecoins, particularly those pegged to the USD, offer a direct, peer-to-peer solution to these pain points, enabling near-instant settlement at a fraction of the cost.

Analysis: Deconstructing the Stablecoin Utility Report

The Stablecoin Utility Report, conducted by YouGov on behalf of crypto infrastructure firms BVNK, Coinbase, and Artemis, provides one of the most granular looks at user sentiment across 15 countries, including key African markets. With over 4,650 responses from individuals who currently hold or plan to hold crypto/stablecoins, its findings are revelatory.

1. The Africa-Centric Adoption Curve

The data shows a clear geographical skew in stablecoin enthusiasm. While high-income economies show moderate interest, low and middle-income economies (LMICs) in Africa and Asia exhibit explosive growth intent. The figures for Nigeria (80% current holders) and South Africa are extraordinary compared to global averages. This is not speculative; it is a response to acute financial friction. The survey also highlights India as another emerging market with strong demand, reinforcing the pattern of adoption in nations with restrictive or inefficient capital controls and foreign exchange markets.

2. The “Crypto Trading” vs. “Payments” Dichotomy

Globally, the Boston Consulting Group (BCG) estimates that nearly 90% of stablecoin transaction volume is for trading other cryptocurrencies on exchanges—a speculative, circular economy. The African survey suggests a potential bifurcation. While trading remains a use case, the intent for payments is substantially higher in these markets. The 95% figure in Nigeria wanting to be paid in stablecoins is a powerful indicator of a shift from asset to utility. However, the report crucially notes that actual spending on goods and services remains low (~6% globally), highlighting the “last mile” problem: merchant acceptance.

3. The Revenue & Business Case

The phrase “stablecoin call for revenue” in the original title is apt. For businesses and entrepreneurs in Africa, stablecoins represent:

• Reduced FX Costs: Bypassing expensive bank forex spreads and intermediary fees for international supplier payments.
• Access to Global Markets: Receiving payments from international clients in a stable digital currency without needing a complex foreign bank account.
• Treasury Management: Holding a digitally native, USD-pegged asset that is less susceptible to local currency devaluation, protecting profit margins.
• Faster Settlement: Eliminating 3-5 day delays in traditional wire transfers, improving cash flow.

Chris Harmse, co-founder of BVNK, captures this: “People are already getting paid and spending stablecoins, particularly where conventional payments are slow, dear, or unreliable… [they are] requesting greater integration into their existing financial tools.” This is a bottom-up demand for institutional-grade infrastructure.

4. The Monetary Policy Dilemma: Dollarization and Flight Risk

Central bankers’ skepticism is rooted in legitimate macroeconomic fears:

• Financial Dollarization: Widespread adoption of USD-pegged stablecoins could effectively dollarize the economy without the Federal Reserve’s control, undermining the central bank’s ability to set interest rates and control money supply.
• Deposit Drain: If citizens and businesses move savings from local bank accounts into stablecoins, it could reduce the deposit base that banks use for lending, constricting domestic credit.
• Capital Flight: During times of economic stress or currency devaluation, stablecoins could facilitate a rapid exodus of capital out of the local currency and financial system.
• Loss of Seigniorage: The government’s profit from issuing currency could diminish if digital dollars become the de facto currency.

Governor Kganyago’s comments reflect a nuanced position: recognizing the remittance cost problem stablecoins solve, but implying that any regulatory framework must be designed to mitigate these systemic risks. The U.S. regulatory moves, like the proposed GENIUS Act (a legislative framework for stablecoins), are being watched closely as a potential model, but the implications for emerging markets are complex.

Practical Advice: Navigating the Stablecoin Ecosystem

For individuals and businesses in Africa (and similar markets) considering stablecoins, a pragmatic, risk-aware approach is essential.

For Individual Users

• Start with Reputable Platforms: Use well-established, compliant crypto exchanges and on/off ramps that support your local currency (e.g., Luno, Binance, Yellow Card in Africa). Verify their regulatory status.
• Understand the Peg: Not all stablecoins are equal. USD-pegged coins like USDT and USDC are dominant, but their stability depends on the issuer’s reserves. Research the issuer’s audit reports and transparency.
• Secure Your Holdings: Move significant amounts off exchanges into a self-custody hardware wallet (e.g., Ledger, Trezor). The mantra “not your keys, not your coins” is critical.
• Use for Intended Purpose: If using for remittances or payments, ensure the recipient can accept or easily convert the stablecoin. Peer-to-peer (P2P) platforms are often the bridge.
• Tax Awareness: In many jurisdictions, converting stablecoins to local currency or using them to purchase goods may be a taxable event. Keep records.

For Businesses and Entrepreneurs

• Integrate with Payment Processors: Explore crypto payment gateways like BVNK, Coinbase Commerce, or BitPay that can convert stablecoin payments to local currency in real-time, mitigating volatility and accounting complexity.
• Treasury Strategy: Consider holding a portion of working capital in stablecoins as a hedge against local currency depreciation, but have a clear liquidation policy and understand the counterparty risk of the issuer.
• Supply Chain Finance: Use stablecoins for faster, cheaper international supplier payments, especially with partners who are crypto-savvy.
• Advocate for Clarity: Engage with industry associations to provide feedback to regulators. The industry needs clear rules on stablecoin issuance, custody, and payment licensing to foster safe growth.

For Policymakers and Regulators

• Develop a Proportional Framework: Regulation should focus on stablecoin issuers (reserve requirements, transparency) and custodial service providers (AML/CFT, consumer protection), not necessarily banning user activity.
• Explore CBDC Integration: Consider how a Central Bank Digital Currency (CBDC) could coexist or interoperate with private stablecoins to improve domestic payment systems while maintaining monetary sovereignty.
• Foster Sandboxes: Regulatory sandboxes can allow for controlled experimentation with stablecoin use cases for remittances and trade, providing real-world data to inform policy.
• International Coordination: Engage in global standard-setting bodies (like the FSB, IMF) to develop cross-border rules for stablecoins, as they are inherently international instruments.

FAQ: Common Questions About Stablecoins in Africa

Are stablecoins legal in Nigeria and South Africa?