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Will Stablecoins Remake Africa's Banking Networks? A Cost Revolution in Remittances and Trade Settlement, and Implications for Japan 《Africa Blockchain Frontier 2026, Part 3》

横山（凡）- ケニア拠点で事業開発支援 @ アクセルアフリカ

In the first quarter of 2025, the average cost of sending $200 (approximately 32,000 yen) to Sub-Saharan Africa was 8.78%, including both transfer fees and exchange margins.

This is the highest regional level in the world (World Bank remittance cost statistics).

Meanwhile, Orca Fraud, a fraud detection firm that contributed to the report, explains that remittance rails (mechanisms for moving money) using stablecoins can sometimes keep costs below 1%. However,

this is an industry estimate; the actual total cost, including fees for purchasing or converting to local currency and exchange spreads, varies depending on the provider and the route.

Stablecoins are crypto assets designed to peg their price to a specific fiat currency, such as the US dollar or a local currency. They are

created with the goal of price stability, rather than aiming for significant price appreciation.

Dollar-pegged coins like USDT and USDC are used as, so to speak, 'digital dollars' (though they cannot always guarantee price maintenance).

In the first installment, we looked at the overall landscape of blockchain investment in Africa, and in the second, we examined the practical services attracting capital.

Based on the CV VC × Absa 'African Blockchain Report 2025' (5th Edition) as foundational material, this is the 'Africa Blockchain Frontier 2026' report series exploring the current state of Web3 in Africa.

In this third installment, we will focus on stablecoins. Why are stablecoins being chosen in Africa as a rail to supplement bank transfers? We will unravel the reasons in the order of remittances, trade, and regulation.


1. Why Stablecoins in Africa?

First, we must grasp how 'heavy' existing bank transfers are in Africa.

For individual international remittances, multiple entities such as banks, money transfer operators, cash pickup points, and mobile wallets are involved, causing transfer fees and exchange margins to accumulate.

For B2B and trade settlements, transactions pass through multiple correspondent banks (partner banks that mediate overseas transfers), adding fees and exchange costs at each intermediary bank, and sometimes requiring advance funding.

It is not uncommon for it to take several days for funds to arrive.

The background also includes a shortage of dollars and exchange rate instability. In countries where the local currency is prone to devaluation, both individuals and companies seek dollars as a store of value.

However, official dollars are hard to come by. This situation of 'wanting dollars but being unable to access them' creates demand for dollar-pegged stablecoins.

The '8.78%' mentioned at the beginning is the average cost calculated by the World Bank for small-value remittances to Sub-Saharan Africa.

International remittances are also widely used by migrant workers to send living expenses to their families back home.

A cost of nearly 10% directly impacts the lives of recipient households. A major reason stablecoins are attracting attention is that they have the potential to reduce this friction, not just for speculation.

2. USDT and USDC as Rails for Remittance and Value Preservation

The demand is clearly reflected in the numbers.

According to Chainalysis,the on-chain value received by Sub-Saharan Africa exceeded $205 billion (approximately 32.8 trillion yen) from July 2024 to June 2025, an increase of about 52% compared to the same period the previous year.

This is the third-highest growth rate in the world (the Orca Fraud contribution to the report also cites this data).

Furthermore,this report states that stablecoins account for approximately 43% of crypto asset transaction volume in Sub-Saharan Africa.

Chainalysis's 2024 public analysis also indicates the same 43% ratio.

In other words,in the Sub-Saharan African crypto asset market, stablecoins have become one of the primary assets supporting real-world demand beyond speculation.

A symbolic example is that ofYellow Card, a crypto asset company operating in various African countries.

According to the company, its transaction composition was 100% Bitcoin in 2019, but when it added USDT (a representative dollar-pegged stablecoin), it says that 99% shifted to stablecoins within a few months.

By country, Nigeria stands out.

The report,based on the 2024 Chainalysis edition, introduces Nigeria as ranking second in the world for overall crypto asset adoption and as one of the world's leading markets for stablecoin usage.

According to the report,from July 2024 to June 2025, the scale of crypto asset transactions was approximately $92.1 billion (about 14.7 trillion yen), with an estimated 26 million users, and stablecoins accounted for about 43% of the transaction volume.

The volatility of the naira (Nigeria's currency) and the occasional dollar shortages are fueling this movement.

Living in Nairobi, one can feel a part of this change firsthand.It is not uncommon to hear of freelancers who receive compensation from overseas companies choosing to receive it in USDT rather than via bank transfer.

This is because the funds arrive quickly, fees are low, and they can preserve value in dollar terms. However, such grassroots expansion and institutional safety are separate issues.

3. From Remittances to Trade and Travel—Expanding Use Cases

The use cases for stablecoins go beyond individual remittances.

An easy-to-understand example isthe travel industry. TurnStay, a travel payment company that contributed to the report, estimates annual losses due to payment friction at $700 million to $2.2 billion (approximately 110 billion to 350 billion yen), based on Africa's international tourism revenue of about $42.6 billion (approximately 6.8 trillion yen).

For high-priced travel bookings, 5 to 9 international payments can occur between accommodations, tour companies, and agencies, andthe total fees can sometimes exceed $150 (approximately 24,000 yen).

Both are the company's estimates and case studies, not independent audit statistics, but they are an example that shows the weight of dollar-denominated payments.

The company claims that these costs can be reduced using stablecoins.

However, it should be noted that TurnStay is a party that utilizes stablecoin payments for its own services, and these estimates are provided by the company itself.

In fact, the company itself states that "stablecoins are not a panacea," citing challenges such as regulatory inconsistency, the immaturity of local currency exchange (off-ramps), and a lack of understanding among business operators.

Nevertheless, the movement to use stablecoins as a "common rail" for cross-border B2B payments and trade settlements is spreading. Cedar Money and Kredete, introduced in Part 2, are also part of this trend.

4. The "On-chaining" of Local Currencies Has Also Begun

While the current protagonists are dollar-pegged stablecoins like USDT and USDC, another movement is emerging: stablecoins pegged to local currencies.

The report points out that stablecoins are emerging as "not just a type of crypto-asset, but an independent regulatory category".

According to the regulatory chapter written by Yellow Card, the Central Bank of Nigeria (CBN) established a stablecoin working group in October 2025 and is considering a Naira-pegged version.

At the time of the report, a Rwandan bill approved by the cabinet and sent to parliament in March 2026 showed a design that would allow the issuance of foreign currency-pegged stablecoins on the condition of full reserves, while prohibiting franc-pegged tokens.

Subsequently, the Rwandan Chamber of Deputies adopted a law regulating virtual asset businesses in May of the same year.

In the private sector as well, initiatives for local currency stablecoins are emerging, such as the Naira-pegged cNGN in Nigeria and the Rand-pegged ZARP in South Africa.

The goal is to put not only the dollar but the local currency itself on-chain, making it available for domestic and international payments.

However, these are still in the early stages of development, and the degree of adoption and the backing of reserve assets must be confirmed on a case-by-case basis.

5. How Exchange Rate Reform Changes the Boundary Between "Formal" and "Informal"

Another factor influencing the demand for stablecoins is the exchange rate reform underway in major remittance-sending countries.

The larger the gap between the official rate and the market rate, the easier it is for remittances to flow into informal channels such as Hawala, P2P, and unregulated stablecoins.

Conversely, if exchange rates approach market realities, the competitiveness of formal remittances through banks and licensed operators will recover.

The report also organizes the correlation between exchange rate normalization and the recovery of formal remittances.

Nigeria integrated multiple foreign exchange markets in June 2023, shifting the formation of the Naira exchange rate more toward a market-based approach.

In December of the same year, it also lifted the ban on banks dealing with crypto-asset operators.

According to this report, around this time, formal remittance inflows increased from approximately $250 million (about 40 billion yen) to about $600 million (about 96 billion yen) per month.

Egypt and Ethiopia are even more striking examples.

In March 2024, Egypt significantly liberalized its exchange rate as part of an IMF program.

According to this report, formal remittances in the first quarter of 2025 increased by 84.4% year-on-year to $8.33 billion (about 1.3 trillion yen).

Ethiopia also shifted to a market-based exchange rate in July 2024, likewise under IMF conditions. The report states that formal remittance inflows increased by 36.5% in the first six months.

Herein lies the most striking paradox of this installment.

According to the Central Bank of Egypt, the country received a record high of approximately $41.5 billion (about 6.6 trillion yen) from overseas workers in 2025.

The report positions Egypt as Africa's largest recipient of remittances.

Nevertheless, cryptocurrency services are effectively banned in their entirety under the Central Bank Law (194/2020).

Although the demand for remittances is enormous, the formal gateways for cryptocurrency services are closed.

The report states that even under such prohibitions, the use of stablecoins for remittances and value preservation via P2P (peer-to-peer) and off-platform channels is widely reported.

Ethiopia is even more extreme.

This report estimates that while formal remittance inflows were approximately $6.5 billion (about 1 trillion yen) in 2024, funds from the diaspora (including informal amounts) reached over $27 billion (about 4.3 trillion yen), with approximately 78% of that passing through informal Hawala (traditional remittance networks) or unregulated stablecoins.

However, the source and estimation methodology for this total amount and ratio are not provided in the report, and independent verification is required.

As exchange rates approach market realities, the relative attractiveness of formal channels increases, which may lead to an increase in remittances in official statistics.

The figures for Egypt and Ethiopia suggest this relationship, but they do not directly measure how much informal capital has shifted to formal channels.

6. Do they compete with banks?—Risks and caveats

We have looked at the advantages so far, but stablecoins are not a panacea.Let us also look at the points of caution.

First is the risk of illicit use. The FATF (Financial Action Task Force), citing Chainalysis estimates, states that stablecoins accounted for 84% of identified illicit cryptocurrency transaction volume in 2025.

This does not mean that 84% of stablecoin transactions are illicit. Nevertheless, a convenient rail for payments can also be a convenient rail for illicit funds.

The FATF also acknowledges that while stablecoins have legitimate uses, it is calling for strengthened supervision of issuers, intermediaries, and P2P transactions, noting that their liquidity and interoperability could also be exploited by criminals.

Second is the issue of reserve assets and convertibility.

To maintain a '1 coin = 1 dollar' peg, issuers must secure reserve assets with sufficient value and liquidity, such as cash or short-term government bonds.

Stablecoins with insufficient backing risk losing their value if they cannot be converted to dollars when needed.

TurnStay also states that 'poorly structured stablecoins actually carry risks.'

Third is the inconsistency of regulations.

As we will see in Part 4, the number of countries with clear regulations is increasing, but the continent as a whole is still in the process of development.

For banks, stablecoins are both a competitor and, if combined with regulation, a potential part of new payment infrastructure.

According to this report, in South Africa, movements have begun to connect crypto companies to domestic payment systems with the support of banks, such as Yellow Card obtaining approval as a third-party payment provider with the backing of Standard Bank and Nedbank.

In other words, 'remaking' as mentioned in the title does not mean eliminating banks.

It is more realistic to view it as filling the gaps that existing banking networks could not cover with alternative rails, and eventually connecting with banks and regulators.

7. Implications for Japanese Banks, Trading Companies, and Remittance Firms

So, how should Japanese business people interpret this movement?

One perspective is that Africa is pioneering the 'next payment infrastructure.' The starting point is different from Japan, where bank accounts and correspondent banking are the premise.

Many people do not have accounts, exchange rates are unstable, and existing remittances are expensive.

It is precisely because of that environment that stablecoins are being chosen as practical tools. You cannot decipher this market by simply applying Japanese common sense.

When our company, Axel Africa, interacts with Japanese firms in Kenya, we get the impression that many people's understanding of African payments is still stuck at 'mobile money like M-PESA.'

However, on the ground, a structure is beginning to emerge where mobile money serves as the domestic interface, while stablecoins handle cross-border payments behind the scenes.

For Japanese banks, trading companies, and remittance providers, this is both a competitor and a potential means to lower the costs of trade and remittances with Africa.

There are ways to get involved beyond just issuing them yourself.

There are various entry points, such as partnering with local payment providers, providing technology for compliance and fraud prevention, or participating in trade settlement pilot programs and more.

In the final installment, Part 4, we will look at the foundation supporting these movements—that is, how far regulations have progressed across Africa's 54 jurisdictions.

Whether stablecoins can evolve from assets used in informal channels into payment infrastructure connected to the formal system depends on the development of regulations.

❚ For those interested in the African cross-border payment and stablecoin sector

In Africa, stablecoins are strengthening their real-world presence as a new rail for remittances, trade, and B2B payments.

Axel Africa is a Japanese consulting firm with the vision of 'contributing to Africa's sustainable growth by connecting Japan and African nations to co-create businesses that solve social issues.'

With an office and community house in Kenya, we cover major African countries and provide end-to-end support, from market research to local partner collaboration and business development.

If you are looking to 'understand the changes in Africa's payment infrastructure based on primary information,' please feel free to consult with us.

❚ Notes

  • This series uses the CV VC × Absa 'African Blockchain Report 2025' (5th Edition) as a foundational document.

  • Building on the figures in the report, we have referenced and supplemented them with independent primary information from central banks, international organizations (IMF, World Bank), and research firms (Chainalysis).

  • The descriptions related to stablecoins in this installment owe much to contributions from issuers like Circle, crypto asset businesses like Binance and Yellow Card, user companies like TurnStay, and peripheral infrastructure companies like Orca Fraud. These are treated as industry perspectives and cross-referenced with official documents.

  • A list of references is provided at the end of the article.

  • Dollar-denominated amounts are approximate, calculated at a rate of 1 USD = 160 JPY (for comparability, this series uses a fixed rate of 1 USD = 160 JPY across all four parts).

  • Investment and corporate data are generally as of 2025, and regulatory and policy information is confirmed as of July 2026 unless otherwise noted.

  • The '84.4% increase to $8.33 billion' in Egypt's formal remittances is based on the Q1 2025 figures reported in the document.

❚ References

[Foundational Document] - CV VC × Absa 'African Blockchain Report 2025' (5th Edition) https://www.cvvc.com/insights

[Independently Referenced Primary Information]

[Note] - Dollar-yen conversions are calculated at 1 dollar = 160 yen (approximate). For the sake of comparability, this series uses a fixed rate of 1 dollar = 160 yen across all four parts. -


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