Key takeaways:
Stablecoins have become common tools for savings, payments, and trade in Nairobi and Lagos.
Inflation, currency fluctuations, and high remittance fees drive their adoption.
Connections to mobile money services make stablecoins feel accessible and useful.
Concerns persist regarding reserves, scams, and evolving regulations.
On a Tuesday morning in Nairobi, Amina sends an invoice to a client in Berlin. By afternoon, USDC is in her wallet, and in minutes, she cashes out to M-Pesa. What used to seem experimental is now routine, thanks to services like Kotani Pay linking stablecoins to mobile money.
Meanwhile, in Lagos, Chinedu operates a small shop and keeps his working capital in Tether’s USDt. Holding “digital dollars” allows him to restock imports without the risk of losing margins due to the naira’s volatility.
He is not alone. From July 2023 to June 2024, Nigeria processed nearly $22 billion in stablecoin transactions — the highest volume in Sub-Saharan Africa.
The appeal is economic. Sending money to the region through traditional remittance channels costs an average of 8.45% (Q3 2024), while digital-first providers have reduced fees to around 4%.
Adding a stablecoin transaction and a reliable cash-out option sharpens the savings, especially on $200-$1,000 transfers that support families and small enterprises.
Costs vary by market, but the principle remains: For millions dealing with inflation, currency controls, and exorbitant remittance fees, stablecoins provide a means to preserve value and transfer funds using just a phone.
The macro squeeze: Inflation, FX and remittance friction
Nigeria’s cost-of-living challenges persist. Inflation has declined from early-2025 highs but remains harsh, with the consumer price index (CPI) at 21.88% in July 2025, significantly above target and continuously eroding purchasing power.
Currency reforms since 2023, including multiple devaluations and a shift to a more market-driven FX system, have heightened short-term volatility for households and importers who price essentials in dollars.
Kenya’s situation is somewhat milder but follows a similar trend. Inflation rose to 4.5% in August 2025, fueled by increased food and transportation costs, while the shilling’s fluctuations kept USD demand high among traders.
Additionally, the world’s costliest remittance corridor exacerbates the situation. The World Bank’s Remittance Prices Worldwide indicates that Sub-Saharan Africa had an average of 8.45% in Q3 2024, well above the UN’s target of 3% and higher than the global average of 6%.
For families sending $200-$500 at once, these costs can mean the difference between timely rent payments and falling behind.
These pressures clarify why stablecoins are becoming a pragmatic solution for freelancers, traders, and small businesses from Nairobi to Lagos.
Did you know? Nigeria’s diaspora remitted approximately $19.5 billion in 2023 — about 35% of all remittances to Sub-Saharan Africa.
Why stablecoins? The practical economics
For individuals earning across borders or saving in weak local currencies, stablecoins serve as “digital dollars” with two significant benefits: Transactions are available round the clock, and fees are often lower than those of traditional money services (especially for cross-border payments).
This blend of speed and cost-effectiveness explains much of their popularity in emerging markets.
In Sub-Saharan Africa, this trend is already observable. Chainalysis data reveals that stablecoins now comprise the largest portion of everyday crypto activity.
In Nigeria specifically, transactions below $1 million were predominantly in stablecoins, totaling nearly $3 billion in Q1 2024. Overall, stablecoins represent about 40%-43% of total crypto volume across the region.
Tether’s USDt (USDT) and USDC (USDC) are the most popular options. Cost considerations influence behavior, with Tron emerging as a preferred network for transferring USDT; by mid-2025, it accounted for the largest share of USDT’s supply. The rationale is straightforward: People choose options that are cheapest and most reliable.
How it works on the ground
On-/off-ramps and P2P
In Kenya and Nigeria, most individuals obtain USDT or USDC through a blend of regulated fintechs and peer-to-peer (P2P) platforms, then cash in or out via banks or mobile money.
Yellow Card, active in about 20 African nations, primarily conducts transfers in USDT. Its Yellow Pay service links users across countries and enables local cash-outs, including mobile money. Currently, stablecoins represent 99% of Yellow Card’s operations.
Mobile money bridges
In East Africa, platforms like M-Pesa and other mobile wallets form the backbone. Kotani Pay offers conversion services enabling partners to settle in stablecoins and pay directly into M-Pesa.
Mercy Corps’ pilot in Kenya utilized Kotani to explore USDC-to-M-Pesa savings. The process is simple: receive in USDC, convert to shillings, and spend through the same wallet that users routinely utilize.
Fintech scale-ups
Some companies keep the crypto aspect hidden. Chipper Cash, for instance, utilizes USDC for instant dollar exchanges across its network, having also begun employing Ripple’s technology to facilitate funding in nine African markets. For customers, it offers a quicker, more affordable alternative to a familiar wallet.
Everyday use cases
Savings: Transforming small amounts into digital dollars to safeguard against inflation.
Payroll and gigs: Freelancers and creators often receive payments in USDC, converting only what is necessary to local currency.
Trade and inventory: Small and medium-sized enterprises settle accounts and compensate suppliers in stablecoins; Yellow Card reports business payments among its fastest-growing sectors.
Remittances: Stablecoin transactions with local cash-out features frequently outperform traditional remittance services, particularly for $200-$1,000 transfers.
Mobile money is ubiquitous, with more than 2 billion registered accounts worldwide. Sub-Saharan Africa sits at the forefront of this movement.
Regulation and policy drift
Nigeria
The regulatory landscape has shifted significantly in recent years, evolving from prohibition to cautious acceptance, and now towards stricter enforcement.
In December 2023, the Central Bank of Nigeria lifted its ban on banking and permitted banks to establish accounts for virtual-asset service providers (VASPs).
However, in 2024, the situation changed again: Authorities intensified their crackdown on naira P2P platforms and Binance, detaining executives, suspending naira trading pairs, and warning of upcoming regulations against illicit trading.
Legal cases and disputes continued into 2025. Meanwhile, the Nigeria Securities and Exchange Commission updated its crypto regulatory framework in January 2025, with the new Investment and Securities Act (ISA 2025) clarifying registration obligations for digital-asset firms. Additional licensing, disclosure, and marketing scrutiny are anticipated.
Kenya
The Finance Act 2023 introduced a 3% Digital Asset Tax, which the Supreme Court upheld in late 2024.
However, in mid-2025, policy shifted again. The Finance Act 2025 repealed the tax and replaced it with a 10% excise duty on fees charged by virtual-asset providers. Users and operators now need to navigate excise, VAT/DST, and reporting requirements.
Ultimately, frameworks are changing rapidly. Always verify the latest local regulations before selecting a provider.
Did you know? Approximately one in six Kenyan adults lacks a formal financial account. As of 2021, formal financial inclusion achieved 83.7%, meaning 11.6% of adults were completely excluded from both formal and informal financial services.
The risk ledger
Stablecoins address the problems of speed and cost, but they also present their own risks, primarily falling into three categories.
Peg and counterparty
The reliability of stablecoins hinges on the soundness of the reserves and governance that back them. Analyses from the Bank for International Settlements and the International Monetary Fund indicate that rapid growth could lead to financial-stability challenges, such as forced sales of reserve assets or “dollarization” undermining local monetary control.
The USDC de-peg in March 2023 underscored how quickly confidence can be shaken. Independent reviews have also indicated transparency issues and concentration of issuers as ongoing concerns.
Operational
On the ground, everyday risks encompass P2P fraud, wallet theft, bridge failures, and complications in cashing out.
Regulatory actions may exacerbate these issues. Nigeria’s clampdown between 2024 and 2025 froze accounts, leaving balances inaccessible overnight, illustrating how abruptly access can vanish.
Policy
On a systemic scale, heavy dependence on dollar-pegged stablecoins can accelerate informal dollarization and shift transactions outside of regulated banking channels. In reaction, policymakers are advocating for stricter licensing, more stringent reserve requirements, and greater transparency from issuers.
Did you know? At the 2025 Stablecoin Summit in Lagos, SEC Director-General Emomotimi Agama stated, “Nigeria is open for stablecoin business, but under conditions that protect our markets and empower Nigerians.”
What comes next for stablecoins in Africa?
While stablecoins won’t resolve inflation or change FX policies, they are already making saving, receiving payments, and sending money across borders cheaper and faster for many in Nairobi, Lagos, and beyond. Their integration with mobile money enhances their practical appeal.
Builders perceive stablecoins as everyday utility tools, while regulators express concerns about dollarization and financial stability. The interaction between these elements will influence future developments.
In practice, the most prudent approach is clear: Maintain low costs, choose reputable providers, and remain vigilant as regulations evolve.
Looking ahead, it is likely that clearer disclosure requirements, stricter licensing, and more “crypto in the background” services will emerge, where users experience seamless transfers without engaging directly with tokens, just value moving swiftly and affordably.
This article does not serve as investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research when making choices.
