Stablecoins account for 43% of total cryptocurrency trading volume in sub-Saharan Africa, far surpassing Bitcoin. The trend is fueled by local currency instability and limited access to the US dollar.
According to the latest report by Chainalysis, stablecoins have emerged as the most traded cryptocurrency in Sub-Saharan Africa, accounting for 43% of total trading volume between July 2023 and June 2024. This figure far exceeds the 18.1% share of Bitcoin, the world's leading cryptocurrency.
The popularity of stablecoins is said to stem from the need for stable storage of value and international payments in sub-Saharan African countries, where local currencies are often volatile and access to US dollars is limited.
Source: Chainalysis Stablecoin: Solution to the problem of foreign currency shortage
“About 70% of African countries are facing a foreign exchange shortage, and businesses are struggling to access the US dollars they need to operate. Stablecoins provide an opportunity for these businesses to continue operating, grow, and strengthen the local economy,” said Chris Maurice, CEO of Yellow Card, a cryptocurrency exchange platform in Africa.
Chainalysis’ report also found an inverse relationship between stablecoin usage and the depreciation of local currencies. This was particularly the case in Nigeria, where stablecoin usage increased from around $0.5 billion in July 2022 to over $1 billion in April 2024, coinciding with a sharp depreciation of the naira.
Ethiopia is also a rapidly growing stablecoin market, with 180% year-over-year growth in retail-scale stablecoin transactions. Similar to Nigeria, the Ethiopian currency has also experienced a significant depreciation over the past year.
Nigeria is currently the hub of cryptocurrency activity in sub-Saharan Africa, with about 85% of transactions valued at less than $1 million, indicating participation mainly from individual investors and small businesses.
Source: Chainalysis
“People are starting to realize the practical applications of cryptocurrencies, especially in day-to-day transactions, rather than just seeing cryptocurrencies as a get-rich-quick scheme,” said Moyo Sodipo, COO and co-founder of Busha, a Nigerian cryptocurrency exchange.
While Bitcoin and altcoins remain important in the cryptocurrency ecosystem, the growing popularity of stablecoins in sub-Saharan Africa suggests a broader adoption trend is underway, focusing on real-world applications of cryptocurrencies rather than speculation.
