Stablecoins represent 40% of crypto economy in Sub-Saharan Africa

Stablecoins now represent more than 40% of Sub-Saharan Africa’s crypto economy as businesses turn to dollar-pegged options.

Stablecoins have emerged as a vital component of Sub-Saharan Africa’s crypto economy, accounting for approximately 43% of the region’s total transaction volume, according to a recent report from Chainalytics.

In countries grappling with volatile local currencies and limited access to the US dollar, dollar-pegged stablecoins such as Tether (USDT) and Circle (USDC) have gained prominence, allowing businesses and individuals to store value, facilitate international payments, and support cross-border transactions. trade.

“Nearly 70% of African countries face foreign exchange shortages and businesses are struggling to access the dollars they need to operate,” Yellow Card CEO Chris Maurice told Chainalytic.

Share of Bitcoin and stablecoins in Sub-Saharan Africa | Source: Chainaliz Stablecoins will become primary use case for crypto in South Africa

As a result of this struggle, Ethiopia, Africa’s second most populous country, has seen retail-sized stablecoin transfers rise 180% year over year, fueled by a recent 30% devaluation of its local currency, the Birr.

“As traditional financial institutions struggle to keep up with demand for US dollars, stablecoins are increasingly being seen as a ‘surrogate for the dollar,’” said Maurice, adding: “If you can get into USDT or USDC, you can easily convert that into stable dollars elsewhere.”

Looking ahead, Rob Downes, head of digital assets at ABSA Bank, a major African bank operating in 12 African countries, predicts stablecoins will play a significant role in Africa’s economic landscape, noting that dollar-pegged tokens will be the “primary use case.” for crypto in South Africa in the next three to five years.”