Stablecoins gain ground in Nigeria, South Africa as businesses seek FX hedge

Nigeria and South Africa are emerging as global hotspots for stablecoin adoption, with nearly 80 percent of respondents in both countries already holding the dollar-pegged digital tokens and most planning to increase their exposure, according to a new survey conducted by YouGov.

The Stablecoin Utility Report, commissioned by crypto firms BVNK, Coinbase and Artemis, surveyed more than 4,650 individuals across 15 countries who either hold or intend to hold cryptocurrencies. It found that demand for stablecoins is growing fastest in Africa’s two biggest economies, alongside other emerging markets such as India.

In Nigeria, 95 percent of respondents said they would prefer to receive payments in stablecoins rather than the naira, highlighting mounting appetite for digital dollar alternatives in a country grappling with currency volatility. Over half of respondents globally said they had increased their stablecoin holdings in the past year, with developing economies driving the strongest growth.

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Stablecoins, which are typically pegged to the U.S. dollar, have become a $310 billion market globally. The sector is dominated by tokens such as Tether and Circle, whose USDT and USDC coins together account for the bulk of market value.

Separate industry data underscores Africa’s growing centrality in the digital asset ecosystem. A report by Yellow Card exchange found that stablecoins accounted for 43 percent of all digital asset transactions in Sub-Saharan Africa last year, with Nigeria alone recording more than $22 billion in stablecoin transactions.

Nigeria remains Africa’s largest digital asset market and ranks among the world’s leaders in adoption, according to blockchain analytics firm Chainalysis. South Africa, meanwhile, has recorded some of the fastest growth rates, with average month-on-month increases in stablecoin volumes of around 50 percent since late 2023 and nearly six million holders.

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The appeal is clear: stablecoins promise faster and cheaper cross-border payments in regions where traditional banking infrastructure is often slow, costly or unreliable.

Chris Harmse, co-founder of BVNK, said usage is already moving beyond speculation. “People are already getting paid and spending stablecoins, especially where traditional payments are slow, expensive, or unreliable,” Harmse said.

Remittances illustrate the opportunity. Lesetja Kganyago, governor of the South African Reserve Bank, recently noted that it can cost as much as $30 to send $100 to neighboring Mozambique, a gap digital tokens could potentially narrow.

Despite surging interest, everyday use remains limited. Consulting firm BCG estimated last year that nearly 90 percent of stablecoin transactions are linked to crypto trading, while just six percent relate to payments for goods and services.

The YouGov survey similarly highlighted limited merchant acceptance as a key barrier to broader retail adoption. While users in emerging markets are keen to hold and receive stablecoins, spending them in shops or online remains constrained.

Corporate use, however, is expanding. African businesses increasingly deploy stablecoins for liquidity management and treasury operations, particularly in countries facing currency depreciation.

Nigeria’s naira has lost over three-quarters of its value in the past five years, while other African currencies have experienced similar declines, driving interest in dollar-backed assets.

Central banks across emerging markets remain cautious. Because 99 percent of stablecoins are pegged to the dollar, policymakers fear widespread adoption could accelerate economic dollarisation, weaken domestic monetary control, and facilitate capital flight.

Yet regulatory momentum in the United States, including proposed legislation such as the GENIUS Act, is expected to provide clearer frameworks for issuers and potentially boost global adoption further.

Industry leaders argue that if properly regulated, stablecoins could ease Africa’s long-standing cross-border payment bottlenecks. According to the International Monetary Fund, only 12 percent of intra-African payments are fully processed within the continent, with most transactions routed through dollar clearing systems in Europe or the United States.

By bypassing multiple currency conversions and correspondent banking chains, stablecoins could reduce settlement friction and lower transaction costs, proponents say.

Still, Africa’s stablecoin ecosystem remains heavily dependent on Western-issued tokens. While local alternatives such as Nigeria’s cNGN and AfriqCoin are emerging, U.S.-backed USDT and USDC continue to dominate usage.

For now, survey data suggests that in Nigeria and South Africa at least, consumer sentiment is firmly bullish. With more than three-quarters of holders planning to increase their positions over the next year, Africa’s two largest economies are not just participating in the global stablecoin boom, they are helping drive it.

Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.

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