Stablecoins have become a crucial component of the Sub-Saharan African crypto economy, accounting for 43% of the region’s transaction volume. In contrast, bitcoin (BTC), the top cryptocurrency, held an 18.1% share of Sub-Saharan African transaction volumes between July 2023 and June 2024.

According to the latest Chainalysis report, stablecoins are especially popular in Sub-Saharan African countries with highly volatile local currencies and limited access to U.S. dollars. To businesses and individuals, stablecoins are seen as a reliable way to store value and facilitate international payments.

Commenting on the growing prominence of stablecoins, Chris Maurice, CEO of Yellow Card, said:

“About 70% of African countries are facing an FX shortage, and businesses are struggling to get access to the dollars they need to operate. Stablecoins provide an opportunity for these businesses to continue to operate, grow, and strengthen the local economy.”

The Chainalysis report highlights a potential inverse relationship between stablecoin usage and the Nigerian naira’s performance in recent years. Data shows that the value of stablecoins received in Nigeria rose from roughly $0.5 billion in July 2022 to over $1 billion by April 2024, before dipping slightly in December 2023. This coincides with the depreciation of the naira.

Ethiopia, with a year-over-year (YoY) growth of 180% in retail-sized stablecoin transfers, has the fastest-growing market in the region, according to Chainalysis. As reported by Bitcoin.com News, Ethiopia’s currency has also experienced significant depreciation in the past year.

Nigeria, meanwhile, is identified in the report as the epicentre of crypto activity in Sub-Saharan Africa. The report finds that Nigerian crypto activity is primarily driven by retail and professional-sized transactions, with roughly 85% of the value of transfers received being under $1 million.

Commenting on Nigeria’s dominance, Moyo Sodipo, COO and Co-founder of Busha, one of the two recently licensed crypto exchanges, said:

“People are starting to see the real-world utility of cryptocurrency, especially in day-to-day transactions, which is a shift from the earlier view of crypto as just a get-rich-quick scheme.”

While bitcoin and altcoins remain significant components of the crypto ecosystem, the Chainalysis report suggests that the growing preference for stablecoins indicates “adoption on a broad scale.”

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