Monetary emergency exit. THE stablecoins are these stable cryptocurrencies which offer the benefits of blockchain without the volatility. Their secret is in one word: support. Each token is based on a “fiat” currency, dollar or euro, the value of which it copies. And once again, it is Africa that proves to be fertile ground for this type of innovation. Explanations.
The key points of this article:Africa has revealed extraordinary potential for the adoption of cryptocurrencies, offering a solution to failing traditional financial systems.
Local stablecoins, backed by African currencies, have emerged as a tailored response to economic challenges, promising fast and affordable transactions.
Africa, land of crypto adoption
On the African continent, cryptocurrencies have found particularly favorable breeding ground. They are massively used there for overcome the failures of traditional financial systemswhere banks remain inaccessible to a large part of the population. Figures from Chainalysis confirm this trend: sub-Saharan Africa is the region where the use of cryptocurrencies weighs the most in relation to the size of its economy. Fund transfers occupy a central place, a sign that the inhabitants have made the token an everyday tool rather than an object of speculation. Stablecoins, too, are carving out a special place for themselves. Those backed by the dollar serve as shield against inflation and the devaluation of local currenciestwo scourges that are eating away at the savings of millions of people. But these solutions are not free from defects however. Transaction fees sometimes remain high, confirmation times are getting longer, and local regulations complicate access to cryptocurrencies in several countries.
Stablecoins are enjoying great success on the African continent – Source: Compte
Local stablecoins: A suitable solution?
Faced with these obstacles, many players are now betting on local stablecoinsbacked by African currencies rather than the greenback. The idea: to propose an alternative that sticks to the realities on the ground. We remember the declarations of intent of the continent’s central bankers not so long ago. THE cNGNa token pegged to the Nigerian naira, for example opened the way in February 2024 to streamline internal payments. This type of asset promises to reduce conversion costs and simplify transfers between neighboring countries, where using the dollar today adds a layer of costs. Projects like Celo and Stellar are also building the corresponding infrastructures in parallel and their objective can be summed up in two words: fast and cheap payments, designed for African uses and not transferred from abroad. Finally, let us note that the major global crypto players have understood the particular needs of the continent, and that they are rushing to offer their services. Africa could thus become one of the world’s stablecoin laboratories. Rising adoption, concrete needs, fragile local currencies: the continent brings together the ingredients of an ideal testing groundwhere these financial technologies will perhaps find their most advanced form before being exported elsewhere.