Stablecoins now account for over 40% of sub-Saharan Africa’s cryptocurrency economy as companies move towards dollar-pegged options.
According to a recent report from Chainalysis, stablecoins have emerged as an important component of sub-Saharan Africa’s crypto economy, accounting for around 43% of the region’s total trading volume.
Dollar-pegged stablecoins such as Tether (USDT) and Circle (USDC) are gaining traction in countries with volatile local currencies and limited access to the US dollar, allowing businesses and individuals to store value and Now you can facilitate payments and help across borders. trade.
“About 70% of African countries are facing currency shortages, leaving businesses struggling to access the dollars they need to operate,” Yellow Card CEO Chris Morris said in comments to Chainalysis. I’m struggling,” he said.
Share of Bitcoin and Stablecoins in Sub-Saharan Africa | Source: Chainalysis
Stablecoins become the main use case for cryptocurrencies in South Africa
As a result of this struggle, Ethiopia, Africa’s second most populous country, has seen a 180% year-on-year increase in retail-scale stablecoin remittances, driven by a recent 30% devaluation of the local currency, the Birr.
Stablecoins are increasingly being seen as “proxies for the dollar” while traditional financial institutions struggle to meet demand for the dollar, Morris said, adding, “If you can participate in USDT or USDC, You can easily exchange that for hard dollars elsewhere.”
Looking to the future, Rob Downs, head of digital assets at ABSA Bank, a leading African bank with operations in 12 African countries, believes stablecoins will play a pivotal role in Africa’s economic landscape. He predicted that dollar-pegged tokens would “become a key use case.” Contribute to the South African crypto market over the next 3-5 years. ”
