Stablecoins and the Future of African Remittances
Anslem Oshionebo on whether regulated stablecoins can cut the cost of sending money to Africa, and what still stands in the way.
Africa remains the most expensive region in the world to send money to. Senders still lose close to 8 percent of a $200 transfer to Sub-Saharan Africa on average, according to World Bank data, against a UN target of 3 percent. Having led an international money transfer company, I have watched every new technology promise to fix that. Stablecoins are the first in a long time that could change the economics of the rails themselves.
Why stablecoins matter for remittances
A stablecoin is a digital token designed to hold a steady value, usually one US dollar, backed by reserves. It moves on a blockchain in minutes, at any hour, for a small network fee. For a remittance company, that can replace the slowest and most expensive parts of a transfer: correspondent banking hops and prefunded accounts sitting idle in every payout country.
Regulation is catching up
The United States passed the GENIUS Act in 2025, creating a federal framework for payment stablecoins with reserve and disclosure requirements. In Nigeria, the Investments and Securities Act 2025 recognises digital assets as securities and brings them under the oversight of the Securities and Exchange Commission. Clear rules make it possible for licensed businesses, rather than only informal traders, to use these rails.
What still stands in the way
- The last mile. Families need naira, cedis or shillings in a bank account or mobile wallet. Off-ramps with deep local liquidity and fair exchange rates are still the hard part.
- Foreign exchange policy. Central banks manage currency flows closely, and any remittance model must respect official FX rules and reporting.
- Compliance. Stablecoin transfers still require customer identification, sanctions screening and transaction monitoring. Speed does not remove obligations.
- Consumer protection. Recipients need to understand what they hold and how to convert it safely.
How a stablecoin-powered transfer works
- A sender in the United States pays dollars into a licensed money transfer app.
- The provider converts the dollars into a dollar-backed stablecoin and sends it on a blockchain to a partner in Nigeria.
- The partner converts the stablecoin into naira at a quoted rate.
- The recipient receives naira in a bank account or mobile wallet, often within minutes.
The sender and recipient never handle crypto directly. The stablecoin is simply the settlement rail between two licensed businesses.
The risks to manage
- Reserve quality. A stablecoin is only as good as the assets backing it. Providers should use coins with transparent, regularly audited reserves.
- Compliance. Blockchain transfers must still meet anti-money laundering, sanctions and travel rule requirements.
- Exchange rate and liquidity. Converting into local currency requires deep, reliable liquidity at fair rates.
- Operational security. Private keys and wallets must be protected like cash in a vault.
What to watch next
In the United States, federal stablecoin legislation passed in 2025 created a framework for payment stablecoin issuers. In Africa, regulators are taking different approaches, from licensing digital asset service providers to restricting certain activities. Companies that build with regulators, not around them, will be the ones allowed to scale. For families, the result should be lower costs and faster transfers; for businesses, faster settlement and better cash management.
The likely path
Most customers will never see a stablecoin. They will use a familiar app that quietly settles on stablecoin rails in the background and pays out in local currency. The companies that win will pair that infrastructure with licensing, treasury management and trusted local payout partners. If that happens, the cost of sending money home could finally fall toward the target the world set years ago.
Common questions
What is a stablecoin?
A stablecoin is a digital token designed to hold a stable value, usually one US dollar, backed by reserves such as cash and short-term government securities.
Will stablecoins make remittances cheaper?
They can reduce settlement cost and time, but savings reach customers only if local currency payout, liquidity and compliance are also efficient.