Bitcoin disappointment: Why stablecoins gain ground in Africa

​Stablecoins have become the dominant force in Africa’s crypto market, accounting for about 75% of exchange activity in South Africa and even more on some other platforms. Meanwhile, Bitcoin trading volumes have dropped by 95% over five years, and in countries like Nigeria and Egypt, stablecoins are effectively acting as a “third exchange rate” that better reflects the real value of local currencies.

The table explains why USD-pegged stablecoins are growing in popularity across the continent. They allow locals to bypass the banking system and acquire USD-pegged stablecoins that preserve value far better than the naira or the Egyptian pound. Countries with restrictive exchange controls tend to have large and nimble black markets for Forex, and these black market rates tend to reflect the real worth of local currencies. Stablecoin exchange rates tend to track more closely to these black market rates.

In Nigeria, stablecoins accounted for 43% of exchange volumes in 2025 though that figure is growing rapidly, due primarily to an unstable local currency (the naira) and inflation above 20% which has prompted a shift into US dollar-pegged Tether (USDT).

Africans have discovered the tremendous utility of stablecoins for preserving wealth, cross-border remittances, trade and ordinary payments which can be made instantly. It’s not hard to see why Nigerians are adopting Tether and other USD-pegged coins like USDC. The naira has lost close to 200% of its value over the last five years, primarily due to exchange control liberalisation, in the process wiping out the savings of those holding the local currency.

Carel de Jager, CEO of African crypto analytics firm Silver Sixpence, observes that stablecoins are the new engine of growth in the crypto market, though he cautions that a revival of a bull market in crypto prices may challenge that. The decline in exchange crypto volumes has been offset by a rise in stablecoin activity, but it’s clear that this is the year of the stablecoin. What may be driving this decline in crypto volume may be over-regulation, he concludes.

“I don’t like seeing such a big decline in volume,” De Jager told Moneyweb. “This industry used to be booming. It used to be extremely exciting. I’m not saying it is not anymore, but I am saying that the sentiment, at least if you look at that kind of data, has declined.

“And I’m wondering why. If that is attributed to regulations, then I think we need to ask ourselves some very hard questions.

“Do the regulations achieve its mandate in protecting consumers? If it does, then that’s great. If it does not achieve its mandate, but we’re still seeing a decline in volume, is that because of these stringent regulations? And if that is the case, then we have to reflect a little bit. Aren’t we stifling the industry?

Source: SA Insights Ledgercore

Globally, you can see the ascendance of stablecoins since 2021, with a market cap now approaching $300 billion versus about $1.5 trillion for BTC. That’s not to suggest stablecoins will catch BTC’s market cap anytime soon, but it’s a distinct possibility within the next decade. It is nowhere near catching BTC in the near term, but it is conceivable within the next decade. 

What the above table shows is that the rise of stablecoins measured against crypto volumes is a worldwide phenomenon.

Source: SA Insights Ledgercore

Reasons why stablecoin volumes in Africa are surging

Currency volatility and dollar hedging: Africans are accustomed to weak local currencies and high inflation. USD-pegged stablecoins offer a way out of this inevitable impoverishment. Companies in Africa are starting to switch to stablecoins as a treasury management strategy to avoid exposure to local fiat weakness.

Liquidity and trading efficiency: Most spot trading on African exchanges occurs in stablecoin pairs because they offer deeper liquidity, faster execution, and easier movement between different cryptocurrencies. Traders keep their powder dry by parking funds in Tether and USDC, rotating into BTC, Ethereum or altcoins as needed. This internal exchange activity drives high stablecoin pair volumes. Once they enter the blockchain universe, they tend to remain. A large portion of the stablecoin volumes we are seeing on South African exchanges are traders choosing to remain within crypto rails, as exchanges like Luno and VALR quote crypto pairs in Tether, such as BTC/USDT and ETH/USDT.

Fiat on-ramp and off-ramp challenges: Converting directly to and from local currencies like the South African rand and Nigerian naira can involve higher fees, slower bank processing and regulatory requirements. Stablecoins provide a quicker, 24/7 bridge, especially for cross-border remittances, business payments, or moving value within the continent.

Stablecoins offer a competitive alternative to fiat: Central bank controls are being eroded by the popularity of stablecoins and this is seen as a threat to national sovereignty. The fact that ordinary people in Africa can acquire a currency not controlled by their central banks – and, by extension, the politicians to whom the central banks report – is a new-found freedom and a form of competition to locally issued fiat.

Expert opinion

It’s clear where the trend is taking us: stablecoins are already dominating South African exchanges and this is likely to become the norm across Africa. Persistent currency volatility remains the primary catalyst. In Nigeria, where the naira has faced repeated devaluations, and in South Africa, where rand fluctuations affect everyday affordability, users see stablecoins as a dollar hedge. Liquidity entering the blockchain ecosystem tends to remain there to avoid the costs associated with converting back to fiat, creating a pool of capital that is likely to continue expanding.

Fiat on-ramps are often slow, costly, and subject to banking friction, including regulatory requirements and limited operating hours. By contrast, stablecoins offer continuous liquidity, lower transaction costs, and near-instant settlement, making them an increasingly preferred base layer for trading.

Survey data shows that nearly 80% of crypto users in Nigeria and South Africa already hold stablecoins, with more than 75% planning to increase their holdings in the coming year. This signals a broader shift: crypto in Africa is evolving from speculative activity into essential financial infrastructure. Over the next decade, the region’s fintech landscape is likely to be shaped less by Bitcoin’s price volatility and more by the steady circulation of digital dollars.