Local stablecoins, a digital version of national currencies pegged 1:1 to local fiat, are fast emerging as a practical bridge between Africa’s financial systems and the global digital economy.
Beyond crypto speculation, they represent programmable money, assets that move instantly, at lower costs, and with greater transparency.
For Africa, where cross-border payments remain slow, fragmented, and expensive, they could change how people trade, save, and send money.
At the Moonshot tech event on Wednesday, October 15, David Salami, Chief Technology Officer of Hyperbridge, made a compelling case for why African banks, fintechs, and mobile money operators should become issuers of locally pegged stablecoins.
Expert view on stablecoins as Africa’s next evolution of money
“Money is a story we tell,” Salami said in his 10-minute TEDx-style talk. “For too long, the financial story of Africa has been one of high fees, currency friction, and banking delays. Stablecoins give us the chance to tell a new story. Let’s build a new financial system together.”
His argument was simple yet powerful: stablecoins could cut cross-border payment costs by up to 99 per cent, help Africa leapfrog legacy banking barriers, and unlock a wave of digital inclusion.
Drawing parallels to the Rai stones of the ancient Yap people, massive limestone discs once used as currency through a collective agreement, Salami described money as a “collective fiction.”
“Value is socially constructed,” he noted. “If the Yap people could agree that a stone represents money, we can agree that programmable tokens — stablecoins — represent the next evolution of value.”
Why local stablecoins matter
Africa’s financial systems, according to Salami, are deeply fragmented. “Africa’s financial plumbing is broken,” he said, citing World Bank data showing that the continent’s average remittance fee is 7.9 per cent, the highest in the world.
A Zambian fish trader, for instance, may lose up to 7 per cent of her profit on regional transfers. A South African expatriate sending $1,000 home to Ghana pays excessive fees and waits days for the funds to arrive.
Stablecoins, particularly local ones, offer a way out. Transactions on blockchain networks cost as little as $0.01 and settle instantly, compared to $15–$50 and multiple days for traditional banking wires.
But Salami warned that U.S. dollar-pegged stablecoins like USDT and USDC have hidden dangers. “They risk dollarising African economies and fuelling capital flight,” he said.
Instead, he urged financial institutions to create local variants pegged to national currencies such as the Nigerian naira and South African rand.
The business case for issuers
Beyond financial inclusion, local stablecoins offer a profitable business model for banks and fintechs.
When users deposit fiat to mint stablecoins, issuers hold those funds in reserves and invest them in low-risk, high-yield assets like government bonds. In return, the stablecoins circulate as non-interest-bearing digital tokens.
In Africa, where local bond yields range from 8–12 per cent, the model is even more attractive than in the U.S., where treasury yields average 4–5 per cent.
Salami noted Tether’s success as proof of scalability. “Tether, with a $179 billion market cap, reported $14 billion in 2024 profits with just 150 employees,” he said. “African institutions can replicate this model, armed with regulatory licenses, customer trust, and existing infrastructure.”
Local stablecoins as a business solution
For businesses, especially those operating regionally, local stablecoins promise a new way to handle payments, supply chains, and remittances.
Imagine a Ghanaian exporter getting paid instantly in a naira-pegged token from Nigeria or a Kenyan freelancer invoicing in shilling-backed digital money without losing value in conversion.
These tokens could move seamlessly across borders, settle in seconds, and maintain their value while complying with domestic regulation.
Salami noted that this could “reduce reliance on offshore intermediaries, promote financial inclusion for the informal economy, and give non-Africans access to tokenised African assets.”
Every day, stablecoin use across Africa
Across the continent, millions are already using foreign stablecoins in practical ways to save, pay, and trade.
In Nigeria, inflation remains punishing at 21.88 per cent, eroding purchasing power. Many Nigerians use stablecoins to hedge against naira volatility, storing small savings in digital dollars and converting only what they need into cash.
In Kenya, inflation is milder but still persistent, at 4.5 per cent. Many traders now keep part of their business capital in USDT or USDC, cashing out through mobile money platforms when necessary.
Stablecoins are also reshaping remittances, where fees often exceed 8 per cent. For families sending $200–$500, that cost can mean the difference between paying rent on time and falling behind.
“Local stablecoins can supercharge commerce within the African continent,” Salami said, emphasising that digital versions of local currencies could allow for cheaper regional trade without relying on the dollar.
Fintech scale-ups leading the charge
Several African fintechs have already integrated stablecoins into their core operations, sometimes invisibly to users.
Yellow Card, which operates in about 20 African countries, runs 99 per cent of its transfers using USDT through its Yellow Pay service. This service connects users across borders with local mobile-money cash-out options.
Chipper Cash uses USDC behind the scenes to move dollars instantly across its network. By masking the crypto layer, the app gives users the experience of a faster, cheaper digital wallet.
In East Africa, Kotani Pay connects blockchain networks with M-Pesa, letting users receive or pay in stablecoins that settle directly into mobile money wallets.
These examples show how stablecoins are already integrated into Africa’s financial fabric and how local versions could deepen that transformation.
Nigeria’s cNGN
Nigeria is already testing the waters. The cNGN, a naira-pegged stablecoin launched by Nigerian banks and blockchain partners, offers a model for how local financial institutions can collaborate on domestic issuance.
It aims to bridge traditional finance and digital assets, supporting faster settlements and on-chain transparency while aligning with regulatory expectations.
Unlike the eNaira, which the Central Bank issues, cNGN is private-sector-led, giving commercial banks and licensed fintechs operational control.
The project demonstrates that local stablecoins can coexist with central bank digital currencies (CBDCs), serving different layers of the financial stack.
Rand-Pegged ZARP: South Africa’s digital rand
In South Africa, ZARP, a stablecoin backed 1:1 by the South African rand, has shown how local tokens can work in a regulated environment.
ZARP is audited monthly and fully backed by cash reserves held in South African banks. It trades on local exchanges and integrates with decentralised finance (DeFi) platforms, exposing users to global crypto ecosystems without leaving the rand.
For South African investors and businesses, ZARP has become a trusted tool for managing liquidity, cross-border payments, and tokenised investments — all within the country’s regulatory perimeter.
Building secure and scalable infrastructure
However, Salami stressed that scalability and safety depend on secure interoperability between blockchain networks.
“Without bridges, blockchains remain isolated silos,” he said. Traditional cross-chain bridges often rely on human intermediaries or multi-signature setups, both of which are prone to hack losses that have cost billions globally.
Salami explained that Hyperbridge solves this with cryptographic proofs that eliminate human intermediaries, reducing hack risk to “zero.”
The technology allows stablecoins to move across blockchains securely, ensuring verifiable transfers without sacrificing decentralisation or regulatory oversight.
Regulatory winds are turning favourable
Regulatory attitudes toward stablecoins are shifting. Central banks and financial regulators across Africa are developing crypto frameworks, licensing requirements, and CBDC pilots that recognise digital tokens as legitimate payment instruments.
Salami urged banks and fintechs to seize this moment: “The institutions that act now — leveraging existing trust and licenses — will lead Africa’s financial future.”
Local stablecoins won’t fix inflation or replace monetary policy overnight, but they are already making payments faster, savings safer, and remittances cheaper.
According to Salami, the next step is clear: African financial institutions must move from being observers to becoming issuers.
With trusted brands, established compliance systems, and deep user bases, they are best positioned to issue local stablecoins that serve their people and protect their economies.
“Stablecoins give us the chance to tell a new story. Let’s build a new financial system together.”