Nigeria's leading fintech firm, Flutterwave, is developing a cross-border payment platform powered by stablecoins in partnership with Polygon Labs. This initiative highlights the increasing role of blockchain technology in streamlining payments across Africa. The new platform seeks to revolutionize cross-border transactions across the continent.
Flutterwave's collaboration with Polygon Labs will enable the launch of this service across its network spanning 34 countries. Polygon's blockchain infrastructure is designed to facilitate scalable, swift, and cost-effective transactions on Ethereum, which will boost settlement speed and efficiency.
The CEO of Flutterwave, Olugbenga Agboola, emphasized the transformative potential of this development, suggesting it could significantly reduce the high costs and delays associated with traditional payment systems, benefiting businesses and consumers. He also stated the company's aim to become the preferred payment option when businesses transact with African suppliers. Agboola noted that stablecoin adoption for international payments could direct more financial activity into Africa. By partnering with Polygon, Flutterwave aims to introduce a solution that makes international payments more simple and affordable than many local ones, unlocking new economic opportunities across the continent.
The introduction of this cross-border payment platform coincides with a notable rise in stablecoin adoption throughout Africa. Stablecoins such as USDt (USDT) and USDC (USDC) are increasingly utilized by locals to mitigate inflation and manage ongoing currency instability. A 2024 Chainalysis report highlighted the economic advantages of stablecoins, noting that sending a $200 remittance from Sub-Saharan Africa is approximately 60% cheaper when using stablecoins compared to traditional fiat-based transfer methods.
Cross-border transactions in Africa are known to be slow and expensive, often taking days and costing businesses up to 8% in fees. By leveraging Polygon's blockchain infrastructure, which is known for its sub-$0.01 transaction fees and near-instant settlement, Flutterwave aims to cut settlement times from days to seconds and make remittances significantly cheaper. Marc Boiron, CEO of Polygon Labs, stated that stablecoins on Polygon can advance settlement times from days to seconds and high fees into pennies.
The pilot phase is set to begin in 2025 for select Flutterwave for Business customers, with a full rollout expected in 2026 for all Flutterwave for Business and Send App users. Global multinationals like Uber and Audiomack, who rely on Flutterwave for payments across Africa, will be impacted. Flutterwave has processed over $40 billion to date.
Stablecoins have gained wider use for commercial payments and transfers. Estimates from Nigeria's Securities and Exchange Commission indicate that residents conducted $50 billion in cryptocurrency transactions over the 12 months ending June 2024. Many users seek to avoid administrative delays in cross-border payments, high local interest rates, and the devaluation of the Naira against the dollar since 2023.
