Stablecoins Fuel 40% of Sub-Saharan Africa’s Expanding Crypto Economy

Dollar-pegged stablecoins have become a cornerstone of the Sub-Saharan African crypto ecosystem, making up over 40% of the region’s cryptocurrency transaction volume after Asia, as reported by Chainalysis. These digital currencies, such as Tether (USDT) and Circle (USDC), are increasingly used as an alternative to volatile local currencies and scarce U.S. dollars.

This surge comes as many African nations, faced with foreign exchange shortages and fluctuating currencies, turn to stablecoins for a reliable store of value and efficient means of conducting cross-border payments. These digital assets have helped both businesses and individuals stabilize their finances and facilitate international trade.

Stablecoins Address FX Shortages Across the Region

The growing popularity of stablecoins is most evident in countries like Ethiopia, which has seen a 180% year-over-year increase in retail stablecoin transactions. The spike follows a 30% devaluation of Ethiopia’s national currency, the birr. The lack of access to hard currency has left businesses scrambling for alternatives, with stablecoins stepping in to fill the gap.

Chris Maurice, CEO of Yellow Card, highlighted the severity of the situation, saying, “About 70% of African countries are facing an FX shortage, and businesses are struggling to get access to the dollars they need to operate.” Stablecoins like USDT and USDC have become indispensable for these enterprises, acting as a practical substitute for U.S. dollars.

Looking ahead, many financial experts believe stablecoins will play an increasingly significant role in Africa’s economy. Rob Downes, head of digital assets at ABSA Bank, sees a promising future for these tokens in South Africa. “Dollar-pegged tokens are going to be the primary use case for crypto in South Africa over the next three to five years,” Downes predicts, signaling the growing adoption of stablecoins as a major financial tool.

With stablecoins providing much-needed financial stability, their influence in Africa is expected to grow, shaping the region’s crypto landscape.