Mobile money was Africa’s first great financial leap — and most of the local banks missed it. While telecoms built the rails of everyday payments, banks watched from the sidelines. Now, with stablecoins rising as the next frontier in financial infrastructure, African banks have a second chance.
This month, yet another dollar-backed stablecoin launched in Africa — Ripple’s RLUSD — part of a broader pattern where every major stablecoin circulating today is dollar-denominated. To reduce dependence on foreign rails and boost wider global adoption of their own currency, other geographies are already moving to issue locally backed stablecoins, like China’s plans to launch ones that are yuan-pegged. African countries, too, must act quickly, or risk becoming consumers of other nations’ monetary infrastructure.
Stablecoins — digital tokens typically pegged 1:1 to fiat currencies like the US dollar or a local currency — have always been designed as stable units of account and mediums of exchange, not speculative assets. While they emerged from the crypto ecosystem, their core function has been to bring price stability and transactional efficiency to digital value transfer. Today, stablecoins are powering cross-border payments, digital payroll, merchant settlement, and asset tokenization at scale. Over $250 billion in stablecoins have been issued globally, and usage is surging in emerging markets, with regions like Nigeria leading with nearly $50 million in daily trades. Yet nearly all of them are dollar-backed and issued offshore, with over 99% of volume settling in dollar-pegged coins like Tether and USDC.
This poses a risk: Stablecoins are accelerating dollarization and capital flight from African markets. What if the answer isn’t to fight stablecoins — but to issue them?
Instead of seeing stablecoins as a threat, Africa’s banks should see them as a strategic lever. They already have the licenses, balance sheets, and regulatory relationships. Issuing local stablecoins allows banks to modernize their services, offer digitally native products, and integrate with emerging crypto payment rails.
Moreover, Africa remains the most expensive region in the world for remittances, with fees as high as 8.5%, nearly triple the UN’s Sustainable Development Goal target of 3%. With over $95 billion in remittances flowing into the continent annually — and this number only growing — billions are lost to middlemen each year. But stablecoin-enabled remittance corridors already move funds for as low as mere pennies. Whereas it might cost $8.50 to send $100 via traditional methods, it costs just a fraction of a cent to send the same amount on stablecoin rails. If even a third of Africa’s remittance flows shifted onto local-currency stablecoins, households could collectively save billions annually.
Critics argue that stablecoins weaken monetary policy. But in truth, local-currency stablecoins, especially if issued or regulated by African central banks, are a way to regain influence. They offer a tool for transparent domestic settlements and a hedge against reliance on foreign-denominated rails. If African banks issued even just 5-10% of the $250 billion global stablecoin float, they could capture multibillion-dollar annual yields that currently flow offshore to US issuers.
I’ve advised banks in Uganda and Cameroon on stablecoin strategies. Most are cautious — rightly so. The regulatory environment is still nascent. But forward-thinking banks are already exploring pilot programs. The US is formalizing policy under the GENIUS Act, and Europe has passed the MiCA framework. If African regulators don’t act soon, they risk adopting frameworks built for other economies, with very different needs. Instead, by moving first, African central banks and regulators could shape rules that reflect local realities, while signaling that Africa is not a passive taker of global digital finance standards but an active shaper.
Stablecoins are not just a new payment method. They are the foundation of the next generation of programmable finance. African banks can wait and watch others shape that future — or they can step in, lead, and write the rules themselves.
The opportunity is too big to ignore. But the window won’t stay open for long.
Gwera Kiwana is a fintech and crypto expert driving partnerships at Sling Money. She also serves on the Investment Committee for Launch Africa Ventures’ Fund II and co-founded WWBA.