By Danny Oyekan, Founder, Blockfinex
In most parts of Africa, inflation isn’t an academic concept, it’s a painful reality felt at every purchase. Nigeria’s naira plunged by around 40% in 2023, wiping out savings and straining households. In Zimbabwe, prices soar daily amid triple-digit inflation, and similar challenges ripple across the region. Faced with volatile currencies, Africans are increasingly turning to a surprising solution: stablecoins.
Not Speculation, But Survival
Stablecoins are digital tokens pegged to stable currencies like the U.S. dollar or euro. Unlike Bitcoin, they’re not built for profit, they’re built to preserve value. In economies haunted by sudden devaluation, stability becomes revolutionary.
Consider Nigeria: stablecoins now represent over 70% of all crypto transactions, according to Chainalysis. Why? Not because users are chasing gains, but because they’re protecting their earnings from ever-plummeting local currencies
Across Africa, Same Story
This isn’t just a Nigerian phenomenon. In Ghana, companies use stablecoins to bypass scarce foreign currency for imports. In Sudan and Ethiopia, where banking access is limited, they serve as critical channels for remittances and trade. In Kenya and South Africa, they’re powering cross-border B2B payments, fast, affordable, and independent of traditional banks .
This isn’t finance fantasy, it’s economic necessity.
DeFi in Africa: It Means Dollar Access
When people talk about DeFi (Decentralised Finance), they paint complex images of smart contracts and yield farming. But for many Africans, DeFi simply means access to dollars, without banks or brokers.
All you need is a smartphone and a crypto wallet to receive USDT or USDC. No proof of employment. No minimum balance. No red tape. That’s empowerment, and for Africa’s 57% unbanked population, it’s life-changing .
Challenges Remain
Stablecoins aren’t flawless. Their trust depends on transparent reserves, but some issuers fall short. A collapse could devastate users already at risk from scams. Infrastructure is patchy, especially in rural zones, and converting to fiat still often happens informally, with all the risks that brings.
There’s also misuse, just like cash. And clamping down risks driving activity underground. Nigeria’s 2021 ban on bank-backed crypto didn’t stop usage; it just pushed it off the books.
Smart Regulation Over Ban
Strict bans are tempting for regulators, but often backfire. Nigeria’s clampdown didn’t deter adoption; it drove it underground. Better to regulate smartly: protect users, trace systemic risks, and support innovation. Some countries are taking this path. South Africa’s fintech body is working on stablecoin frameworks, and Ghana and Kenya are exploring regulatory approaches while piloting CBDCs. Even Nigeria’s eNaira rollout shows openness to digital currency innovation.
Investment With Prudence
Despite real demand, investment in African blockchain remains low, with only 2% of global crypto VC going to Africa in 2022. Regulatory uncertainty, few exits, and recall of past failures weigh heavily on investors.
But ignoring stablecoins in Africa means ignoring a tangible market need. The startups poised for success will be those building compliant rails, user education, and financial infrastructure, grounded in local realities.
