Key takeaways:
Stablecoins are now common tools for savings, payments, and trade in Nairobi and Lagos.
Inflation, currency fluctuations, and high remittance fees drive their popularity.
Mobile money integrations make using stablecoins familiar and convenient.
There are ongoing risks associated with reserves, scams, and evolving regulations.
On a Tuesday morning in Nairobi, Amina sends an invoice to a client in Berlin. By afternoon, USDC has arrived in her wallet, and she quickly cashes out to M-Pesa. What once seemed experimental is now routine, thanks to services like Kotani Pay that link 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 without worrying about losing margins to the naira’s volatility.
He is far from alone. From July 2023 to June 2024, Nigeria processed nearly $22 billion in stablecoin transactions, the largest volume in Sub-Saharan Africa.
The economic appeal is strong. Sending money to the region via traditional remittance channels costs around 8.45% on average (Q3 2024), while digital-first operators have reduced fees to approximately 4%.
Adding a stablecoin transfer and a reliable cash-out option amplifies the savings, particularly on $200-$1,000 transactions that support families and small businesses.
Costs vary by market, but the principle remains the same: For millions facing inflation, currency controls, and exorbitant remittance fees, stablecoins offer a means to maintain value and transfer funds using just a phone.
The macro squeeze: Inflation, FX and remittance friction
Nigeria’s cost-of-living crisis endures. Although inflation has decreased from early-2025 highs, it remains severe, with the July 2025 consumer price index (CPI) at 21.88%, well above target and steadily diminishing purchasing power.
Currency reforms since 2023—multiple devaluations and a pivot toward a more market-driven FX regime—have intensified short-term volatility for households and importers who price essentials in dollars.
Kenya’s situation is less severe but follows a similar trend. Inflation rose to 4.5% in August 2025, driven by increasing food and transport costs, while the shilling’s fluctuations kept USD demand high among traders.
Additionally, the world’s most expensive remittance corridor exists here. The World Bank’s Remittance Prices Worldwide show Sub-Saharan Africa averaging 8.45% in Q3 2024, far exceeding the UN’s 3% Sustainable Development Goals target and higher than the global average of 6%.
For families sending $200-$500 at a time, those costs can mean the difference between paying rent on time and falling into arrears.
These challenges elucidate why stablecoins have emerged as practical solutions for freelancers, traders, and small businesses from Nairobi to Lagos.
Did you know? Nigeria’s diaspora sent approximately $19.5 billion home in 2023, accounting for around 35% of all remittances to Sub-Saharan Africa.
Why stablecoins? The practical economics
For individuals earning across borders or saving in fragile local currencies, stablecoins serve as “digital dollars” with two primary benefits: Transfers are available around the clock, and fees are generally lower than traditional money services, particularly for cross-border payments.
This combination of speed and affordability underpins their adoption in emerging markets.
In Sub-Saharan Africa, this trend is evident in real-time. Chainalysis data indicates that stablecoins now dominate everyday crypto transactions.
In Nigeria alone, transactions below $1 million are largely comprised of stablecoins, amassing nearly $3 billion in Q1 2024. Across the region, stablecoins represent roughly 40%-43% of total crypto volume.
Tether’s USDt (USDT) and USDC remain the top choices. Where cost dictates behavior, Tron has emerged as a preferred network for transacting USDT; by mid-2025, it carried the largest share of USDT’s supply. The reasoning is straightforward: People gravitate toward the cheapest and most reliable options.
How it works on the ground
On-/off-ramps and P2P
In Kenya and Nigeria, individuals typically acquire USDT or USDC through a combination of regulated fintechs and peer-to-peer (P2P) marketplaces, then cash in or out via banks or mobile money.
Yellow Card, operating in around 20 African countries, predominantly carries out its transfers in USDT. Its Yellow Pay service connects users across borders and facilitates local cash-outs, including mobile money. Presently, stablecoins constitute 99% of Yellow Card’s operations.
Mobile money bridges
In East Africa, M-Pesa and other mobile wallets form the backbone. Kotani Pay offers conversion services that allow partners to settle in stablecoins and pay directly into M-Pesa.
Mercy Corps’ Kenya pilot utilized Kotani to explore USDC-to-M-Pesa savings. The process is simple: receive in USDC, convert to shillings, and spend through the familiar wallet.
Fintech scale-ups
Some companies keep the crypto layer opaque. For example, Chipper Cash uses USDC behind the scenes to transfer dollars instantly across its network. It has also begun employing Ripple’s technology to facilitate funds across nine African markets. For customers, it appears as a faster, cheaper version of a familiar wallet.
Everyday use cases
Savings: Converting small balances into digital dollars to guard against inflation.
Payroll and gigs: Freelancers and creators often receive payment in USDC, converting only what is necessary into local currency.
Trade and inventory: Small and medium-sized enterprises settle invoices and pay suppliers with stablecoins; Yellow Card notes business payments among its fastest-growing segments.
Remittances: Stablecoin transfers with local cash-out options frequently outperform traditional remittance services, particularly for $200-$1,000 transfers.
Mobile money is ubiquitous, boasting over 2 billion registered accounts globally. Sub-Saharan Africa is at the forefront of this trend.
Regulation and policy drift
Nigeria
The regulatory environment has changed drastically in recent years, evolving from prohibition to cautious permission, and now toward stricter enforcement.
In December 2023, the Central Bank of Nigeria lifted its banking ban, permitting banks to establish accounts for virtual-asset service providers (VASPs).
However, in 2024, the narrative shifted again: Authorities intensified scrutiny on naira P2P venues and Binance, detaining executives, halting naira pairs, and signaling intentions for more regulations against illicit trading.
Legal cases and disputes have persisted into 2025. Meanwhile, Nigeria’s Securities and Exchange Commission updated its crypto framework in January 2025, and the new Investment and Securities Act (ISA 2025) clarified registration responsibilities for digital-asset firms. More regulations around licensing, disclosure, and marketing scrutiny are anticipated.
Kenya
The Finance Act 2023 introduced a 3% Digital Asset Tax, which was upheld by the Supreme Court in late 2024.
However, policies shifted again in mid-2025. The Finance Act 2025 repealed the tax and substituted it with a 10% excise duty on fees charged by virtual-asset providers. Users and operators must now be aware of excise, VAT/DST and reporting responsibilities.
Ultimately, regulatory frameworks are adapting swiftly. Always verify the latest local regulations before selecting a provider.
Did you know? About one in six Kenyan adults lacks any formal financial account. As of 2021, formal financial inclusion reached 83.7%, meaning 11.6% of adults remained entirely excluded from both formal and informal financial services.
The risk ledger
Stablecoins may address issues of speed and cost, but they also present their own risks, categorized into three main areas.
Peg and counterparty
Stablecoins are only as trustworthy as the reserves and governance systems backing them. Analyses by the Bank for International Settlements and the International Monetary Fund caution that rapid growth could spark financial stability concerns, from forced liquidations of reserve assets to “dollarization” that jeopardizes local monetary authority.
The USDC de-peg in March 2023 illustrated how swiftly confidence shocks can propagate. Independent assessments have also highlighted transparency issues and issuer monopolization as ongoing risks.
Operational
In practice, everyday risks include P2P scams, wallet theft, bridge failures, and challenges in cashing out.
Regulatory actions can exacerbate these issues. Nigeria’s crackdown between 2024-2025 froze accounts and stranded funds overnight, showcasing how suddenly access can be revoked.
Policy
On a broader scale, heavy dependence on dollar-linked stablecoins can accelerate informal dollarization and push payments outside regulated banking systems. In response, policymakers are advocating for tighter licensing, stricter reserve requirements, and enhanced 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 on terms that safeguard our markets and empower Nigerians.”
What comes next for stablecoins in Africa?
Stablecoins won’t eliminate inflation or redefine FX policy, but they already make saving, receiving payments, and transferring money across borders cheaper and quicker for many in Nairobi, Lagos, and beyond. Their connection with mobile money is what makes them practical.
Builders position stablecoins as tools for everyday utility, while regulators are concerned about dollarization and financial stability. The balance between these forces will determine the future.
On the ground, the safest strategy is simple: Keep costs minimal, work with reliable providers, and remain vigilant as regulations evolve.
Expected advancements include clearer disclosure mandates, stricter licensing, and an increase in “crypto in the background” services, where users do not interact with tokens directly, but rather experience instantaneous value transfer at reduced costs.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
