Remittances have increasingly become a vital source of financial support for African households, arguably surpassing the impact of traditional aid. As of 2024, remittance inflows to Africa have nearly doubled over the past decade, climbing from roughly $53 billion in 2010 to approximately $95 billion, constituting 5.1% of the continent's GDP. This figure is on par with, and in some years exceeds, official development assistance (ODA) and foreign direct investment (FDI). In 2024, FDI inflows to the continent reached $97 billion. However, excluding a single urban development project in Egypt accounting for $35 billion, the remaining FDI for the continent totaled about $62 billion. This highlights the growing macroeconomic significance and stability of remittances, especially during global crises.

One of the key challenges in cross-border payments in Africa is the high cost, with remittance costs averaging 8.37% in the second quarter of 2024. This has spurred the adoption of stablecoins, digital currencies pegged to fiat currencies like the U.S. dollar, as a compelling alternative. In 2024, stablecoin transaction volumes in Africa topped $50 billion, driven by use cases including remittances, SME payments, treasury management, and freelance salaries. Stablecoins offer benefits such as instant settlement, low fees, and transparent rails, addressing the inefficiencies of traditional systems.

Stablecoins are redefining cross-border payments for African and emerging market enterprises by delivering speed, transparency, and control. They can cut remittance costs by up to 95%, dropping average fees from 6.6% to under 3%, and sometimes to less than $0.01 per transaction. This provides a critical edge for treasury and finance teams, unlocking real-time liquidity and cash flow predictability with 24/7 settlement. Stablecoins also provide access to USD liquidity and FX risk reduction, buffering against volatile local currencies and capital controls.

For example, Flutterwave, a leading African payments technology company, recently announced the integration of stablecoin balances for its customers in collaboration with Turnkey and Nuvion. This initiative aims to simplify cross-border payments using stablecoins like USDC and USDT, offering near-instant settlement, reduced fees, and 24/7 accessibility. This technological partnership leverages Turnkey's blockchain infrastructure to create secure digital wallets and Nuvion's AI-driven platform to bridge fiat and stablecoin ecosystems.

Despite the increasing adoption of stablecoins, challenges remain, particularly around regulation. Many startups operate through offshore structures or rely on third-party partnerships to maintain compliance, while foreign players may have an easier market entry. However, countries like Nigeria are beginning to classify cryptocurrencies and virtual assets officially. In 2024, 43% of all digital asset transactions in Africa were made up of stablecoins. Nigeria dominated the market with over $22 billion worth of stablecoin transactions at that time, and its overall market value hit $59 billion.

Stablecoins are also fostering financial inclusion by enabling access to millions of unbanked or underbanked recipients in high-growth corridors. Clear blockchain audit trails simplify compliance, automate AML/KYC requirements, and reduce fraud risk. As Lasbery Oludimu, Yellow Card's managing director for Nigeria, stated, stablecoins could serve as a catalyst for Africa's transformation into a blockchain-powered financial hub if managed judiciously. Pan-African VC fund Tekedia Capital hailed stablecoins as a lifeline for millions of Africans, powering remittances and trade while accelerating financial inclusion.

While Africa relies heavily on Western stablecoin solutions like USDC and USDT, local solutions like Nigeria's cNGN and AfriqCoin by OnAfriq are emerging. These localized solutions offer alternatives for millions across the continent. Furthermore, the rise of stablecoin payments between Africa and Asia is creating an ecosystem that supports on/off-ramps and payment rails, with over $54 billion in stablecoin transactions recorded in Sub-Saharan Africa between July 2023 and June 2024.