Stablecoins are already fixing remittances and crossborder payments: Now let them finish the job

In 2024, South Africans sent over R19.4 billion in remittances to neighbouring countries, more than triple the R5.9 billion recorded in 2016. But for the millions of people sending money, like migrant workers, gig workers, informal traders, and SMEs, that rise in economic participation has come with a punishing cost.

According to the World Bank, the average cost of sending just $200 from South Africa remains as high as 15%, especially to countries like Zimbabwe, Malawi, and Lesotho. That is more than double the G20 average of 6.8%, and the highest among major sending countries worldwide.

This is not just a drain on individual incomes. It is a systemic failure that punishes participation and slows economic growth. When people lose a chunk of their wages to send money home, when small businesses cannot move or receive funds without being penalised, and when essential cross-border trade is routed through slow, expensive channels, the entire region loses.

From workaround to infrastructure

That is why stablecoins are already working.

These digital currencies, usually pegged 1:1 to the US dollar, made up 43% of all crypto transaction volume in Sub-Saharan Africa in 2024, according to CoinGeek[IP1] .

Stablecoins are no longer a workaround, but the rails powering the ecosystem. Correspondent banks were once the only viable channel for international transfers. But as research has found, limited competition and outdated infrastructure kept fees high and innovation low. Western Union, Remitly, and Flutterwave are examples of businesses that were once reliant on traditional fiat rail infrastructure. Now, they are integrating stablecoins, proof of just how fast the remittance landscape is evolving.

Stablecoins bypass legacy infrastructure entirely. They settle in seconds, not days. They work across borders by default. And they let people store value in stable units like USDC without needing a US bank account or expensive intermediary.

Here is how it works in practice. A migrant worker in Johannesburg receives payment in USDC in their crypto wallet. They use that wallet to withdraw funds in local currency, use their virtual card with their funds locally or purchase vouchers or top-ups which can be redeemed instantly for food, electricity, or airtime. No banking delay, and no cut to intermediaries. Just fast, low-cost, cross-border economic value.

Global adoption, local relevance

According to EY-Parthenon, 13% of global financial institutions and corporates already use stablecoins, and 54% of non-users expect to adopt them in the next six to 12 months. Analysts estimate that 5% to 10% of all cross-border payments will shift to stablecoins by 2030, signifying up to $4.2 trillion in value.

In Africa, that shift has become urgent. Millions of economically active people remain locked out of the formal financial system, not because they are unbanked, but because banks have been too slow to adapt. Minimum balances, documentation requirements, high compliance hurdles, and limited currency flexibility all act as friction points. Stablecoins remove those.

Today, people are often forced to juggle multiple platforms to meet basic needs. They are getting paid on one platform, moving money on another, saving through a third, and spending elsewhere. That fragmentation is inefficient and a symptom of a system that was never built for the realities of the informal economy.

What kind of regulation will we choose?

But this shift also needs guardrails. Stablecoins must be transparent, backed by verifiable reserves, and deployed with consumer protection at the core. The problem is not regulation itself, but regulation that simply replicates broken models and excludes the very people it is meant to protect.

Indeed, as global payment infrastructure evolves, there are suggestions that stablecoin frameworks can support secure, regulated digital dollars that foster competitiveness and inclusion by enabling fast, low-cost payments at scale.

Africa does not need digital replicas of 20th-century banking bureaucracy. It needs frameworks that protect people without locking them out of opportunity. Of course, we have done this before, for example, mobile money leapfrogging banking. Stablecoins now offer a similar opportunity to move past inefficient remittance and banking systems into a world where economic participation is not determined by documents or geography, but by whether the tools actually work.

Real-world use cases are already emerging

Businesses across the continent are using stablecoins to pay remote teams and freelancers across borders. Entrepreneurs and gig workers are receiving payments in USDC and other digital currencies from clients abroad. Informal traders are using stablecoins as a store of value to hedge against local currency instability. And families are moving funds, buying essentials, and settling bills without relying on traditional banking rails.

What ties these use cases together is utility. Stablecoins offer practical tools for a continent that has always done more with less and is ready to leapfrog again. Now the question is whether regulators, fintechs, and businesses will catch up to the people already using them or keep designing systems that leave them out.

Jonathan Katende, Co-Founder & CEO of Lipaworld

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

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