The Stablecoin Surge: How a Chainalysis study reveals Africa’s payments revolution

Having read the 2024 geography of cryptocurrency report by Chainalysis, it’s hard not to feel a spark of excitement about the evolution of stablecoins in Sub-Saharan Africa – particularly as we go through, what looks to be anyway, a bull cycle in the wider digital asset space. What’s unfolding is more than a financial trend; it’s an under-the-radar revolution in how payments are made and how economies adapt. Chainalysis highlights that stablecoins now make up approximately 43% of the region’s total crypto transaction volume, a figure that shows we’re on the cusp of something significant. No longer confined to the realm of degen traders, digital assets, particularly stablecoins, have cemented their place as cornerstones of economic resilience and connectivity.

Why is this happening?

The reality on the ground tells a compelling story. With foreign exchange (FX) crises affecting around 70% of African countries, traditional pathways to accessing U.S. dollars have become increasingly strained. Stablecoins have stepped into this vacuum, not as a gimmick but as a vital tool. Businesses from small importers to large corporations now use stablecoins to bypass the inefficiencies and delays of traditional financial systems. When local currencies waver, stablecoins provide a stabilising force, allowing these businesses to keep running and, crucially, to grow. It’s not just a workaround; it’s a way to maintain economic momentum when conventional systems falter.

Ethiopia is a case in point. According to Chainalysis, the birr’s 30% devaluation triggered a remarkable 180% year-over-year increase in retail-sized stablecoin transfers. This isn’t just data; it’s proof of adaptation and resilience. It shows that in a climate where volatility is the norm, people are finding ways to secure their financial well-being. The use of stablecoins has become an essential part of the toolkit, allowing Africans to hedge against local currency risks and engage in global trade with a semblance of stability.

And it doesn’t stop at business transactions. Stablecoins are redefining cross-border payments and remittances across the continent, which is crucial in a region with significant diaspora flows. These digital assets offer a faster, more affordable alternative to traditional remittance services, linking families and boosting local economies with every transaction. In an environment where time and cost can mean the difference between subsistence and sufficiency, stablecoins have become a linchpin.

This proliferation of stablecoins is also putting Africa’s local currencies on a new global map. Chainalysis points out that stablecoins are facilitating transactions that traditional systems can’t support, opening up African markets to international participation and investment. The trajectory is clear: stablecoins are creating international demand for African currencies, it’s not hyperbole—it’s the beginning of a paradigm shift. By linking local economic activities to stable, dollar-pegged assets, stablecoins are fostering transparency and confidence that invite global interest. Importantly, while chainalysis focuses on dollar-pegged stablecoins, stablecoins can be pegged to a variety of other currencies, commodoties and digital assets. 

Nonetheless, while the momentum is palpable, the regulatory landscape is still playing catch-up. Chainalysis points out that stablecoins operate in a grey area in many countries. In South Africa, for instance, while the FSCA classifies crypto assets as financial products, specific regulations for stablecoins remain undeveloped. In my previous piece, I wrote about how regulations will inevitably have to catch up to the innovation as more of the digitally-native youth in countries like South Africa continue to aggressively adopt digital assets. 

To that end, one thing is clear: this isn’t a temporary stopgap but a fundamental reshaping of how finance works, especially in regions where traditional systems have struggled. The data shows that stablecoins are driving not only transactions but trust, proving that digital assets can be more than the playthings of the risk-hungry; they’re the foundation of a legitimate industry poised for long-term impact.