Stablecoins in African trade: real uses and remaining obstacles

Stablecoins are becoming an alternative way for African businesses to pay overseas suppliers, but costs, security concerns and fragmented technology still limit their spread, according to executives speaking at Moonshot by TechCabal in Lagos. The debate matters because it ties financial innovation to a deeper legal and economic problem: access to foreign currency and efficient cross-border payments.

A practical use, not a speculative one

On the panel, Chinonso Obiefule, lead at Solana Superteam Nigeria, said some Nigerian businesses already use stablecoins to pay suppliers in China when dollars are hard to obtain through conventional banking channels. Representatives of Obiex and Hyperbridge also took part, and the consensus reported was that demand comes less from crypto enthusiasm than from the practical difficulty of getting foreign currency and completing international payments.

Speed is another draw: stablecoins allow funds to move without waiting for the next banking day, which matters when an invoice has to be settled quickly.

The obstacles that remain

Speakers pointed to three brakes: costs, security concerns and fragmented blockchain networks. According to coverage of the event, moving value between African countries often still means routing through foreign correspondent banks or first converting into US dollar stablecoins.

An earlier TechCabal analysis of the off-ramp problem adds that converting back into local currency can cost more than 8% and, in thin markets, erase the expected savings. The technology settles well; the hard part is turning it into spendable local money.

The regulatory backdrop

African regulators are still working out where stablecoins fit within their monetary systems. The issue links to intra-African payments and the African Continental Free Trade Area (AfCFTA), where fragmented payment systems are cited as a major obstacle.

Our view at CEA Digital Law

At the Euro-American Committee of Digital Law - CEA Digital Law, we see an opportunity to regulate thoughtfully rather than merely restrict. When a tool meets a real business need, prohibition rarely removes it; it tends to push it into less supervised channels.

Europe’s experience with Regulation (EU) 2023/1114 (MiCA) and its single authorisation valid across the market shows the value of a common regime: lower compliance costs and greater legal certainty. Africa has no continental equivalent, and each market currently requires its own approval. Gradual convergence, perhaps building on pan-African payment initiatives, would help interoperability.

We suggest three lines of work: clear rules on issuers’ reserves and redemption; supervised, accessible conversion routes that lower off-ramp costs; and coordination between central banks and exchange-control authorities so that innovation does not collide with monetary stability. For Latin America and the Caribbean, which face similar foreign-currency constraints, South-South dialogue on these solutions could be especially fruitful. The open question is how to protect users without closing a route that is proving useful today.

Sources

• TechCabal – Stablecoins gain ground in African trade but face hurdles to wider use
• TechCabal – Africa's stablecoin promise and the off-ramp problem
• TechCabal – Could stablecoins become AfCFTA's missing payment rail?

CEA Digital Law