African businesses are using stablecoins for a bluntly practical reason: cross-border payments are slow, costly, and too often stuck in banking purgatory. Dickson Nsofor, CEO of pan-African payments platform Kora, says the real draw is not crypto theater or speculative nonsense. It is faster settlement for supplier invoices, trade payments, and cross-border payouts.
- Practical use: supplier payments, trade settlement, cross-border payouts
- Main pain points: slow bank rails, FX shortages, multiple conversions
- Big caveat: stablecoins still need banks, compliance, and local payout rails
- Main risk: dependence on foreign dollar-backed issuers
Nsofor said African businesses have increasingly turned to stablecoins over the past five years because they solve a very specific headache: getting money across borders without waiting days for correspondent banks to shuffle it around like paperwork in a bad office prank.
He pointed to one example from Nigeria: paying a Chinese manufacturer through banks could take 10 to 14 days. That kind of lag is brutal for importers, manufacturers, and anyone trying to keep goods moving. It is not a feature. It is friction wearing a suit.
Stablecoins are digital tokens designed to hold a stable value, often by tracking the US dollar. For businesses, that means they can move dollar-like value digitally without depending entirely on the legacy banking chain for every hop. In places where dollar access is limited or expensive, that is a big deal.
Nsofor said cross-border payments within Africa may pass through several banks and require two currency conversions. That is where costs pile up and settlement slows down. Stablecoins can shorten that process, while also helping payment providers manage dollar liquidity more centrally instead of scattering funds across multiple corridors and accounts.
“They are solving a practical problem first. Businesses are seeing a way to move and settle value across borders more efficiently, and that creates the foundation for other financial activity, ” Nsofor said.
That is the useful framing here. Stablecoins are not some magical replacement for the entire financial system. They are a tool that can make parts of the system work better.
“Africa doesn’t need stablecoins to replace mobile money, banks or local payment networks. It needs infrastructure that can connect them.”
That sentence cuts through a lot of the usual crypto hype. The realistic future is not stablecoins bulldozing every existing rail. It is stablecoins sitting inside a broader payment stack, with banks, mobile money, compliance tools, and local payout partners doing the rest of the heavy lifting.
Chainalysis gives that argument some solid backing. In its September 2025 report, the blockchain analytics firm said Nigeria received more than $92.1 billion in cryptocurrency value between July 2024 and June 2025. That figure refers to total crypto value received on-chain, not a GDP-style measure of the economy, so it should not be read as “Nigerians spent $92 billion on crypto.” It is still a huge number, and a useful indicator of how much activity is flowing through the market.
Chainalysis also identified regular multimillion-dollar stablecoin transfers supporting trade, energy, and merchant payments between Africa, the Middle East, and Asia. That matters because it shows this is not just retail speculation or meme-coin gambling. A lot of the activity is tied to real commerce.
Nigeria’s crypto use is heavily shaped by currency devaluation, inflation, and limited access to foreign currency. When local money gets shaky and dollars are hard to source, dollar-linked stablecoins stop looking like a niche crypto product and start looking like a working settlement rail.
That said, Africa is not one market. Nigeria, South Africa, and other major economies have different payment systems, regulations, and business realities. Nigeria tends to be more driven by FX scarcity and retail demand, while South Africa has a more mature institutional setup. Lumping them together is lazy, and lazy analysis usually ages badly.
That is why interoperability matters so much. In payments, interoperability means different systems can connect and exchange value without forcing everyone into the same silo. A wallet should be able to pay into a bank account. A stablecoin platform should be able to connect to mobile money. A business should not need three separate conversion steps and a prayer.
Nsofor said the stack still needs real-world plumbing: licenses, know-your-customer checks, anti-money-laundering screening, transaction monitoring, and compliant conversion between stablecoins and local currencies. In other words, the blockchain leg may be fast, but the real world still wants identity checks, payout partners, and rules. The friction does not disappear. It just moves around.
The Banca d’Italia study helps keep the hype in check. In a paper published on July 30, 2026, Italy’s central bank tested transfers of 200 USDC across ten corridors connecting Italy with Argentina, Brazil, South Africa, the United Arab Emirates, and Japan. The total cost ranged from 0.30% to almost 9%.
The most important part is not the headline number. It is what the study found about the local payout side. South African routes took one or two business days when standard bank transfers slowed the local-currency stage. But routes supported by domestic instant-payment systems could finish in under 20 minutes.
That is the part a lot of crypto marketers skip. The blockchain transfer itself is often only a small slice of the full cost and time. The messy bits are the on-ramp, the off-ramp, the conversion, compliance, and the local payout infrastructure. If those are weak, the user experience gets ugly fast.
The study’s authors were also careful not to oversell their findings. They used one stablecoin, a limited number of transactions, and said the results cannot be applied neatly to every provider or corridor. That caution is healthy. Stablecoin evangelism usually likes to sprint past the footnotes. Reality tends to live there.
So no, stablecoins are not automatically cheaper than traditional cross-border services. Sometimes they are faster. Sometimes they reduce costs. Sometimes they do both. And sometimes they simply move friction from one part of the system to another. The chain may be efficient; the edges are where finance gets messy.
Nsofor’s warning about foreign dollar-backed issuers should be taken seriously too. If African businesses become dependent on offshore stablecoin issuers, they inherit new risks around reserve backing, redemption, regulation, and continued access. That is not a theoretical complaint. It is the tradeoff that comes with using someone else’s dollar system in tokenized form.
That does not mean stablecoins should be rejected. It means the dependency should be understood clearly. They can reduce reliance on slow local banking rails, but they can also create reliance on foreign issuers and foreign policy regimes. That is not decentralization in the romantic sense. It is a different kind of centralization with better branding.
The regulatory backdrop is still messy as well. The source notes that the CLARITY Act failed a procedural Senate vote on Sep. 15, with 49 senators supporting cloture, 50 opposing, and one absent. The motion required 60 votes and was not a final passage vote. That is U.S. policy theater, not a direct explanation for African payment behavior, but it does show how uncertain the broader stablecoin environment remains.
There are also US-linked corridor proposals from companies like Bakkt and Zoth aimed at South Asia, the Middle East, and parts of Africa, including Nigeria. Bakkt’s licensing setup reportedly includes money-transmitter licenses, FinCEN registration, and a New York BitLicense. Those corridors could improve cross-border commerce, but they also underline the same issue Nsofor flagged: if the rail depends on foreign infrastructure and foreign licenses, users inherit foreign risk.
The practical case for stablecoins in Africa is hard to ignore. If a business can pay a supplier, settle an invoice, or move trade value in minutes instead of waiting 10 days, that is a real advantage. If it can avoid multiple currency conversions and cut settlement uncertainty, that matters even more. This is why stablecoins are gaining traction in commerce, even among businesses that probably do not care about blockchain philosophy one bit. It is the same logic behind African businesses turn to stablecoins to cut payment friction, just stripped of the marketing fluff.
That trend does not stop at Africa’s borders. Similar dynamics show up in remittance-heavy markets elsewhere, where companies keep trying to squeeze more speed and less waste out of old payment rails. Chainalysis has framed this broader shift in stablecoin utility and the future of payments, and it is not hard to see why. When money has to cross borders, the old system often behaves like it was built by people who actively hated the concept of efficiency.
Stablecoins also fit into a wider conversation about payment stablecoins and cross border payments, especially where monetary policy, banking access, and settlement rails collide. The upside is obvious: faster, cheaper movement of value. The downside is just as real: foreign-currency dependence, issuer risk, and a lot of compliance headaches that never magically disappear because a token has a nice whitepaper.
For a broader view of the business case, it is worth comparing this trend with other regions where similar rails are emerging. In Asia, firms are already building payment stacks around stablecoins, QR codes, and tokenization, which shows this is not some isolated African phenomenon. It is a global workaround for a global payments system that still wastes too much time and money.
And in other corridors, startups are pitching stablecoins as a better way to move money across trade routes. One example is Tether-backed Mansa’s cross-border payments play, which highlights the same basic thesis: if legacy rails are slow, fragmented, and expensive, builders will keep looking for a better one. Sometimes that better one is blockchain-based. Sometimes it is just less broken software attached to the same financial plumbing.
There is also an important remittance angle here. In markets where families and businesses depend on money sent from abroad, the promise of cheaper transfers is not just a nice-to-have; it is a margin of survival. That is why reports like Stablecoins revolutionize cross-border remittances keep landing with readers who are tired of being gouged by old-school transfer fees and exchange-rate nonsense. The pitch is simple: if the money already exists, why should moving it feel like paying tolls at every mile marker?
Key questions and takeaways
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Why are African businesses using stablecoins?
They help solve real payment problems: slow cross-border transfers, limited dollar access, and expensive settlement. For many companies, that matters far more than the technology label. -
Are stablecoins replacing banks and mobile money?
No. The more realistic model is connection, not replacement. Banks, mobile money, compliance systems, and local payout partners still do a lot of the work. -
Do stablecoins always reduce costs?
No. Banca d’Italia found total costs ranging from 0.30% to almost 9% in its USDC corridor tests, and the full end-to-end cost can still be driven up by conversion and payout friction. -
What makes stablecoin transfers fast or slow?
The local payout side. Instant-payment systems can finish transfers in under 20 minutes, while standard bank transfer routes can take one or two business days. -
What is the biggest risk of relying on stablecoins?
Dependency on foreign issuers and external regulation. Reserve backing, redemption, access, and policy changes can all become pain points. -
What needs to improve for wider adoption?
Interoperability, licensing, KYC and AML compliance, and smoother conversion between stablecoins and local currencies. Without that plumbing, the rail stays clunky. -
What is the bottom line for African businesses?
Stablecoins are useful because they are often less broken than the old payment system, not because they are perfect. They offer speed and flexibility, but they also bring new dependencies.
That is the real story here: stablecoins are becoming useful because they solve actual business problems. They are not magic, and they are not a cure-all. But in markets where speed, dollar access, and settlement certainty matter, they are proving to be a working tool, with real benefits, real constraints, and real risks.
Further reading
A few related pieces that add more context to the stablecoin payment debate.
