Billions of dollars are moved yearly through stablecoins from Africa to foreign countries, yet most of the money never benefits Africans.
It slips away to foreign corporations, where it generates interest and profit for companies like those that provide it to African customers. The effect is simple: while Africa carries the risk and demand, outsiders reap the rewards.
In 2024 alone, Africa’s stablecoin transactions crossed $200 billion, representing around 6.7 per cent of the continent’s GDP. To put that in perspective, this money could have gone into hospitals, schools, infrastructure, and businesses.
Instead, it sits in foreign reserves, helping most of their corporations grow stronger while African governments, businesses, and citizens remain financially troubled.
The cost of sending money in Africa
The popularity of stablecoins in Africa is not without reason. For decades, Africans have paid high fees simply to move money. Traditional payment systems rely on long chains of intermediary banks, international payment networks, and clearinghouses, which make every transaction expensive.
Salifanji Namwila, founder and CEO of DevDraft, explained the problem clearly.
“When you look at the biggest financial fintechs in Africa, including Flutterwave, they’ve been built natively through intermediaries. They partner with banks or through SWIFT, and transaction costs become extremely high because of the four or five intermediaries in between. You find it’s 5% depending on the location; in other regions, it’s like 8% just to send a transfer.”
Namwila did not accept that this was the best Africa could do. With a background in blockchain technology from his time at Dartmouth—where he worked on Ethereum projects and explored cryptocurrency use cases—she saw another way.
“So I started looking into how we could speed up payments within Africa and between Africa, America, and Europe. That’s how DevDraft was born. Fast forward, we are backed by Y Combinator, and right now we are present in Zambia and Malawi as our ICP countries.”
Stories like DevDraft highlight why stablecoins appeal to Africans: They cut costs, reduce delays, and bypass inefficiencies. However, the trade-off is that the financial benefits flow outside the continent.
Who controls the market?
The dominance of U.S. companies in the African stablecoin market cannot be overstated. According to IMF data, Tether and Circle control 85 per cent of the global stablecoin industry. In Africa, their grip is even tighter: Tether accounts for 57.3 per cent, while Circle holds 42.7 per cent.
That means nearly every stablecoin transaction in Africa is tied to these foreign giants. They decide the rules, manage the reserves, and collect the interest. Africans, who need the service most, pay the price.
Worse still, many African fintech startups that appear local are funded by foreign venture capital connected to most global stablecoin providers. Wallets, remittance platforms, and payment processors may operate in African markets, but they are ultimately part of a pipeline designed to channel overseas profits. Africa builds the systems. Outsiders get rich.
Circle and Tether’s African strategies
Both Tether and Circle have made aggressive moves to entrench themselves in Africa, but they do so in different ways.
Circle uses a venture and partnership model. Through Circle Ventures, it invested in CV VC’s $20 million African Blockchain Fund, signalling strong interest in African fintech.
Its USDC Developer Grant Program has also provided funding and technical support to early-stage African blockchain projects—five of which were selected in a recent cohort, the most significant African representation yet. Circle has also struck deals with companies like Onafriq, Flutterwave, and Yellow Card to integrate USDC into cross-border payments and merchant transactions.
Tether takes a more direct path. Its venture arm has invested in companies like Mansa, which led the equity portion of a $10 million fundraising round, and startups such as Sorted Wallet and Shiga.
Tether’s CEO, Paolo Ardoino, has presented the company’s vision grandly.
“If you were asked to invest in the company that would build the power grid, the post office, and finance markets one century ago in North America, would you take that bet? That’s what we’re doing in Africa. Building decentralised energy, communications, and finances for the continent.”
Beyond investment, Tether has also launched education campaigns to promote digital assets across Africa, positioning itself as an investor and a teacher.
The result is clear: both companies are securing deep roots in Africa’s financial future.
The capital drain
Despite this apparent progress, the complex numbers reveal a troubling picture. Around 86 per cent of stablecoin flows in Africa leave the continent, while only 14 per cent remain.
This means that for every $100 transacted, $86 enriches corporations abroad. With an average stablecoin transaction size of $13,108, the outflow adds up quickly. It fuels profits abroad while Africa faces inflation, currency instability, and liquidity shortages.
Can African stablecoins break the cycle?
One promising development is the creation of African-backed stablecoins. The most notable is the cNGN, launched by the African Stablecoin Consortium and backed by the Nigerian Naira.
The cNGN is historic—it is the first regulated stablecoin in Africa—but it has not been free from criticism.
Oye Shobowale-Benson, a finance and blockchain specialist with over 14 years in asset management and risk leadership, has raised serious concerns.
“The cNGN is not just another fintech project; it is a test of Nigeria’s sovereignty in digital finance. Running it on Ethereum, a foreign blockchain, sets a dangerous precedent.”
He believes the project falls short of the IMF’s five safe and efficient payments standards.
“On all five IMF fundamentals of payment safety, efficiency, resilience, accessibility, and trust, cNGN falls short.”
These criticisms underline the challenge: Africa cannot achieve true financial independence if its stablecoins still rely on foreign infrastructure. The key is issuing African stablecoins and ensuring they are built, governed, and managed within the continent.
That only called to the urgency of financial sovereignty if African governments and businesses fail to act, the consequences will be severe. Local governments will continue to lose revenue. Companies will struggle with limited liquidity. Citizens will face rising costs. And foreign corporations will keep winning.
But the alternative is within reach. By developing African-controlled digital currencies, building local payment systems, and governing financial infrastructure with African interests at heart, the continent can retain its wealth and direct it into development. Every dollar kept in Africa strengthens local markets, boosts innovation, and builds resilience.
Africa has the talent, entrepreneurs, and technology. It now needs the political will and institutional frameworks to make financial sovereignty a reality.
Africa’s stablecoin first
The stablecoin debate is not just about technology. It is about sovereignty. It is about independence.
No more letting foreign corporations dictate Africa’s financial systems. No more capital pipelines are leaving the continent under the name of innovation—no more interest from African reserves building foreign treasury.
As the tide of digital finance rises, Africa must decide whether to remain a customer of foreign corporations or build systems that prioritise its own people.