Crypto Wasn’t Built in Africa – But It Was Made for It

By Caleb Maru

What began in 2009 as a way to send money online has evolved into a staggering US$3 trillion market, with countless digital currencies in circulation.

For some, crypto is a high-stakes casino – where values skyrocket and crash within hours. Sometimes, that’s true.

But in Africa, one type of cryptocurrency is proving to be more than just speculative trading. It is solving real-world financial problems.

Enter: Stablecoins

Unlike volatile cryptocurrencies, stablecoins are digital currencies pegged to real-world assets – often the US dollar. That means 1 USDT (a popular stablecoin) is always equal to US$1.

And in Africa, stablecoins are tackling major economic challenges head-on:

• Inflation: Many African nations face double-digit inflation, eroding the value of local currencies. People are turning to stablecoins to preserve their wealth.
• Currency Depreciation: In just four years, the Nigerian Naira lost 66.45 percent of its value, while the Egyptian Pound dropped by 35 percent. For many, stablecoins provide a financial lifeline.
• Remittances: One of the continent’s largest sources of foreign inflows – sending money home – is plagued by inefficiencies and high costs.

The Remittance Revolution

Africans abroad sent over US$100 billion back home last year. But traditional remittance services like Western Union and MoneyGram make the process slow and expensive.

Fees can reach 8 percent per transaction, and payments can take days to clear. And transferring money within Africa? Even worse.

Let’s say you want to send US$200 from Kenya to Uganda. Here are your options:

• M-Pesa (Mobile Money): 6.5 percent fee
• Western Union: US$12 fee, 4-day wait
• Traditional banks: Up to 23 percent in fees, 2-day wait

You lose money and time – two things no one can afford to waste.

Stablecoins Change the Game

With stablecoins, payments settle instantly on the blockchain, at a fraction of the cost. And Africa is catching on.

In 2023, stablecoin transactions in Africa surpassed Bitcoin usage, reaching over US$30 billion in value. Even in countries like Nigeria, where crypto regulations are strict, adoption continues to grow.

Why?

Because stablecoins are the perfect solution to Africa’s payment challenges.

Crypto wasn’t created in Africa – but it might just be the financial revolution the continent needs.

Caleb Maru is Founder and CEO of Tech Safari, Africa’s leading tech community and media company, specializing in tech innovation, market trends, and exclusive insights across the continent. Based in Nairobi, Kenya