Stablecoins spread across Africa as well… “Remittances matter more than aid”

Across Africa, a growing trend is seeing stablecoins replace traditional remittance channels. Amid high remittance fees and inflationary pressure, stablecoins are increasingly viewed as a practical financial alternative.

According to Cointelegraph on the 23rd (local time), Vera Songwe, former UN Deputy Secretary-General, explained the backdrop to the expanding use of stablecoins during a World Economic Forum (WEF) panel discussion in Davos, Switzerland, saying, “In Africa, remittances are becoming more important than aid.” Songwe noted that using conventional cross-border remittance services in Africa typically costs about $6 in fees per $100, making the process overly expensive and time-consuming.

She said stablecoins are sharply reducing remittance fees and settlement times. Under the traditional financial system, cross-border payments can take several days, whereas stablecoins can move funds within minutes. She stressed that these features provide tangible benefits for individuals and small business owners.

Their role as a hedge against inflation was also highlighted. Songwe said that since the Covid-19 pandemic, inflation has exceeded 20% in roughly 12 to 15 African countries. “Around 650 million people in Africa do not have a bank account,” she said, adding, “With just a smartphone, people can use stablecoins to store assets in currencies that are less exposed to inflation.”

Stablecoin usage has been particularly active in countries facing high inflation or tight capital controls, including Egypt, Nigeria, Ethiopia and South Africa. Songwe said most transactions are centered on small and medium-sized enterprises (SMEs), assessing that stablecoins are functioning as a tool to broaden financial access.

Regulatory responses across African countries are also becoming more concrete. Chainalysis said in a report last year that sub-Saharan Africa is among the regions seeing some of the fastest growth in crypto adoption globally. The region recorded about $205 billion in on-chain transactions from July 2024 to June 2025, up 52% from a year earlier.

Meanwhile, country-level moves are diverging. Ghana passed a bill last December to legalize crypto trading by establishing rules for crypto-asset service providers. By contrast, South Africa’s central bank has recently stepped up its vigilance, flagging crypto assets—including stablecoins—as a new financial stability risk.