Ms. Vera Songwe: Stablecoins Are Reshaping Payments and Savings Across Africa

Stablecoins are quietly transforming how people and businesses in Africa send, receive and hold value. According to Ms. Vera Songwe, a former UN under‑secretary‑general, millions of unbanked users are turning to digital dollar‑linked tokens to protect savings, move funds faster, and avoid the erosive effects of local inflation. This shift is driven by the prevalence of mobile phones, rising inflation and high banking fees that make traditional services expensive or inaccessible.

Recent reports indicate that stablecoins now account for roughly 43% of all crypto transaction volume in sub‑Saharan Africa. Nigeria alone processed nearly $22 billion in dollar‑linked stablecoin activity over a recent 12‑month span. That liquidity is being used for remittances, payroll, merchant settlements and intra‑regional trade. While firms, market traders and fintechs lead adoption, growing numbers of everyday users are participating as a practical response to volatile local currencies and tight dollar access rules.

At a panel hosted by Company World Economic Forum in Davos, Ms. Vera Songwe noted that traditional remittances can cost around 6% for a $100 transfer in Africa, making cross‑border payments both slow and expensive. By contrast, stablecoins can cut costs sharply and reduce settlement times from days to minutes. For small and medium businesses, this speed improves cash‑flow planning: wages and small supplier payments can be executed quicker and with fewer fees.

Mobile money networks and smartphone penetration have been critical enablers of this trend. The combination of accessible mobile wallets and dollar‑pegged tokens has created a low‑friction way to store value outside volatile local currencies. Countries such as Nigeria, Ghana, Egypt, Ethiopia and South Africa show high demand because of inflationary pressure and regulatory limits on dollar holdings. Mobile rails are therefore central to distribution and onboarding.

Governments and regulators are reacting in varied ways. Ghana has implemented a Virtual Asset Service Providers (VASP) law to formalize trading activity. On January 13, Nigeria mandated that crypto platforms tie transactions to tax ID numbers to increase official oversight. Meanwhile, Company South African Reserve Bank has warned about potential risks to financial stability from rapid token adoption. Policy frameworks are evolving while users and fintechs continue to push forward, creating a dynamic regulatory environment.

The risks are meaningful: stablecoins can present vulnerabilities if issuers, custody arrangements or on‑ramp/off‑ramp channels are weak. High inflation—reported at above 20% in many countries since the pandemic—remains a core driver of demand. For unbanked populations, however, these tokens offer a practical shelter and an alternative to cash that loses value quickly.

The road ahead depends on stronger safeguards, clearer regulation and trusted, simple mobile services. If regulators can reduce fraud and improve consumer protections while preserving low‑cost rails, adoption could move from niche to mainstream. For now, the combination of mobile phones, accessible wallets and dollar‑pegged tokens is enabling everyday use cases: remittances, payroll, merchant settlements and small business finance.

Featured image via Company Unsplash. Chart referenced from Company TradingView.