Opinion by: Ure Utah, technical advisor to Nigeria’s minister of innovation
As the value of digital currencies approaches $4 trillion, there’s a frenzy to capitalize on the trend. While Elon Musk’s Dogecoin (DOGE) and the Trump coin make headlines, Africa stands at the center of this global financial transformation.
This is a pivotal moment. If African leaders do not take steps to regulate or utilize cryptocurrency, the ensuing measures will determine whether the continent’s 1.55 billion people gain greater control over their futures or face a new phase of financial instability.
The prospects are significant. Embracing crypto could unleash new capital sources, redirect remittance flows, and possibly transform the entire sovereign debt market. Currently, African nations owe the International Monetary Fund (IMF) $42.2 billion — a third of its total credit. Egypt alone is responsible for an astonishing $7.42 billion.
Such debts strain national budgets and impede growth initiatives.
The high-risk gamble
Nonetheless, the risks are enormous. Mass adoption of stablecoins might siphon deposits from local banks, destabilizing the monetary authority of central banks. The most fragile currencies on the continent — such as those in Sierra Leone, Uganda, and Guinea — could falter amid this volatility.
Cryptocurrency purports to democratize finance. Yet, as with any disruptive technology incorporated into global capitalism, it claims to promote inclusion while reinforcing exclusion. It has already been seen to enrich the wealthy.
The African risk rating
The stakes in Africa are substantial. With a youthful population, some economies — like those of oil-rich Niger and Senegal — are rapidly expanding. However, weak regulatory frameworks and low financial literacy levels mean communities most vulnerable to losses are also the most at risk.
If the annual $95 billion remittance flows to Africa shift to blockchain platforms, traditional banks and regulators could be completely marginalized, disrupting monetary policies in numerous countries.
Consider the disparity. In the U.S., Trump’s supportive crypto policies have bolstered America’s borrowing capacity by linking stablecoins to Treasury markets, with Tether holding over $120 billion in government debt. In Europe, tokenization efforts face strict regulations. Meanwhile, China is leveraging its digital yuan to extend influence among Belt and Road partners.
Africa lacks such protections. Therefore, it is imperative for African leaders to act quickly to manage crypto, reduce dependence on IMF bailouts, alleviate sovereign debt pressures, and enhance the continent’s capacity to finance its growth independently.
A framework for regulatory evolution
Robust regulation is not a mere luxury; it is essential to protect citizens from fraud and to instill confidence in African tokenized projects. With this framework, Africa could attract billions in environmental, social, and governance-aligned global capital (which is projected to reach $35 trillion-$50 trillion by 2030).
Investing in financial literacy and skills for decentralized finance (DeFi) is urgently needed to ensure communities can safely utilize digital assets. Additionally, tokenized infrastructure projects can harness crypto for the public good.
Real-life lessons from the world beyond Africa
There are successful models to draw from. The World Food Programme’s Building Blocks initiative utilized blockchain to deliver cash to vulnerable groups, such as Syrian refugees in Jordan. This aid was redeemable at local markets using iris scan technology. Last year, Building Blocks assisted 65 organizations, improving efficiency and aid distribution while saving $67 million.
Inspiration can also be found in the Global North, where crypto and blockchain applications for social good are already prominent. Estonia has developed blockchain-based e-voting, which enhances voter confidence and reduces fraud while speeding up results. The U.S.-based Climate Collective is tokenizing rainforests and other natural resources to preserve ecosystems and monetize carbon reduction. These examples highlight a crucial fact: Crypto can serve communities, not just markets.
Related: The one thing these 6 global crypto hubs all have in common
Earlier this year, the $210-million Immaculata Living Project was launched in Chicago — the world’s largest university-affiliated, crypto-driven real estate project. This collaboration between private enterprises and the American Islamic College is both a social enterprise and a commercial initiative.
This dual focus is significant. By merging profit with purpose, Immaculata illustrates how crypto can deliver community benefits while attracting investors. In a sector often critiqued for speculation, it represents a model for how digital finance can support sustainable and socially transformative projects.
The redevelopment will revitalize the dilapidated, century-old Immaculata campus and add a 22-story tower featuring hundreds of senior living units and accommodations for young professionals — fully equipped with in-house catering, wellness programs, care facilities, AIC courses, and a diverse range of activities.
From experimentation to implementation
This presents an opportunity to democratize property ownership through crypto, allowing individuals to invest in shares of apartments according to their financial capacity. It enables direct investor engagement and wealth creation in a well-regulated manner.
Importantly, the aim is for Immaculata to serve as a model for employing digital currency to benefit both private investments and the public good, generating 50 new jobs, enhancing access to education, and constructing a new, socially inclusive community uniting people of various generations and faiths under one roof — all without taxpayer funding.
Tokenization can move beyond mere experiments in the West. Housing initiatives in Lagos, clean energy projects in Nairobi, or new universities in Accra can all be financed in this manner, allowing global investors a stake while enabling local communities to share in the profits.
African leaders must act to redefine capital regulations — or they risk allowing digital finance to widen the chasm between the wealthy and the impoverished.
Opinion by: Ure Utah, technical advisor to Nigeria’s minister of innovation.
This article is for general information purposes and is not intended as legal or investment advice. The views, thoughts, and opinions articulated here are solely those of the author and do not necessarily mirror the views and opinions of Cointelegraph.
