Stablecoins and OTC trading become the focal points in Africa's foreign exchange future.
In a groundbreaking report titled "The Rise of OTC and Stablecoins: Africa's Quiet FX Revolution," TechCabal Insights, in collaboration with Quidax Technologies FZCO, has shed light on the significant surge in the adoption of stablecoins and over-the-counter (OTC) cryptocurrency trading in Sub-Saharan Africa (SSA).
The report reveals that stablecoins now account for 43% of all cryptocurrency transactions in the region, surpassing Bitcoin’s share by more than double. This shift towards stablecoins as the dominant asset class for crypto settlements in SSA is a testament to their appeal due to features such as price stability, near-instant settlement, transparent audit trails, and the avoidance of forex volatility, which is critical in a region with unstable local currencies.
Global OTC crypto volumes surged by 106% year-over-year in 2024, with much of this growth being driven by Africa-focused stablecoin activity. OTC trading is pivotal for facilitating large-scale, direct crypto transactions outside traditional exchanges, enabling more efficient cross-border payments and liquidity access.
Nigeria leads the region, processing over $59 billion last year and accounting for about 40% of stablecoin inflows in SSA, positioning it as the second-largest global crypto market after India by transaction volume. Other countries like Ethiopia and Zambia have seen stablecoin inflows grow by more than 100% year-over-year, indicating rapid adoption across diverse markets in SSA.
OTC markets have significantly reduced settlement times (from five days to minutes) and lowered FX transaction costs by up to 2% per trade, addressing traditional banking inefficiencies in the region. Furthermore, OTC crypto trading provides licensed, compliant pathways aligned with local KYC/AML regulations, increasing institutional confidence and facilitating business growth in Africa’s evolving crypto ecosystem.
The report depicts a quiet FX revolution in Sub-Saharan Africa where OTC markets and stablecoins are transforming the region’s financial landscape by enabling faster, cheaper, and more stable cross-border and domestic settlements despite ongoing regulatory challenges and bans in some countries. Businesses in Africa are increasingly utilizing OTC desks and stablecoins for streamlined cross-border payments, FX volatility management, and faster, more compliant settlement solutions.
The findings suggest a major evolution in the region's financial landscape, positioning Africa as a crucial frontier in the global digital finance revolution. The report focuses on the transformative shift in cross-border transactions across Sub-Saharan Africa, highlighting the potential for further growth and innovation in this space.
Read also:
- Thriving once more: recovery of the gaming sector's downfall
- Revitalize bouncing back: gaming sector rebounds from sales slowdown
- Rapid Growth in Bio-based Polypropylene Sector Anticipated at a Compound Annual Growth Rate of 26.5% by 2034
- European Competition Intensifies: BYD's Strategies for Outpacing Tesla in Europe
