By Rajat Mishra, CPO, Network Product & Deputy Group CPIO at Onafriq
For much of the past decade, discussion around stablecoins have been
dominated by cryptocurrency speculation. Increasingly, however,
stablecoins are emerging as practical financial infrastructure for
moving money across borders, managing liquidity and improving payment
efficiency.
The real opportunity lies not in choosing between traditional finance
and digital assets, but in building an integrated financial ecosystem
where both work together to improve efficiency, broaden financial access
and deepen economic connectivity across the continent.
Despite significant advances in financial inclusion and digital
payments, moving money across African borders remains far more difficult
than it should be. Businesses continue to face challenges when making
cross-border payments. Fragmented payment networks, multiple
intermediaries, and lengthy settlement processes increase costs and
create operational inefficiencies.
Remittance providers, the specialised financial services that millions
rely on to send money home, face many of the same structural challenges.
These providers play a critical role across the continent. In fact, 19
of Africa’s 54 countries [1] receive remittance inflows equivalent to at
least 4% of their GDP. Yet Africa remains the world’s most expensive
region to send money to.
These challenges are not a reflection of remittance providers
themselves, but of the fragmented banking and settlement infrastructure
underpinning international money movement. Financial institutions must
often manage liquidity across multiple disconnected currency markets
while relying on complex correspondent banking networks and clearing
systems. The result is higher costs, slower settlements, and capital
that remains unnecessarily locked up.
One of the most immediate opportunities for stablecoins lies in
improving cross-border settlement. Consider a Kenyan business importing
goods from South Africa. Under traditional settlement models, payments
often pass through multiple correspondent banking relationships, involve
several foreign exchange conversions, and can take days before funds
reach the intended recipient.
Stablecoin-enabled settlement rails have the potential to reduce much of
this friction by enabling value to move more efficiently between
financial institutions across markets. The result can be shorter
settlement times, greater transparency and improved predictability for
businesses operating across borders.
The benefits extend well beyond businesses. For millions of Africans
working abroad, remittances remain a financial lifeline, helping
families pay school fees, healthcare costs and daily living expenses.
Yet sending money home often involves navigating a complex chain of
money transfer operators, correspondent banks, and local payout
partners, with each additional layer introducing costs and delays.
Stablecoins can help streamline the backend movement of funds between
institutional participants, reducing settlement costs and improving
efficiency across the value chain.
For end users, the advantage is simplicity. Recipients do not need to
interact with, or even understand stablecoins directly. They continue to
receive money through familiar, trusted channels, whether a local bank
account or mobile money wallet, only faster and at a lower cost.
Beyond payments, stablecoins also address one of the less visible but
most significant challenges in cross-border finance: liquidity
management. Financial institutions operating across multiple markets
must constantly ensure they have sufficient funds in the right currency,
in the right jurisdiction and at the right time. Today, this often
requires pre-funding accounts across multiple countries, a costly
practice that traps large amounts of capital and limits financial
flexibility.
Stablecoins introduce a new model for moving value across borders in
near real time, enabling institutions to manage liquidity dynamically as
demand arises. This can reduce the need for large pre-funded balances,
improve treasury efficiency and free up capital that can be deployed
more productively. Ultimately, these efficiencies can translate into
faster settlements, lower costs, and better services for businesses and
consumers alike.
However, the true value of stablecoins will not come from isolated
blockchain networks operating independently of existing financial
systems. Their long-term impact will depend on how effectively they
integrate with banks, mobile money platforms, payment service providers
and existing payment infrastructure. Interoperability will be critical
to ensuring payment flows move seamlessly between systems, markets and
currencies. The goal should be to strengthen and modernise today’s
payment ecosystem, not replace it.
From experiment to infrastructure: what global moves are telling us
Some of the clearest signals that stablecoins are moving from
experimentation to infrastructure are coming from card networks.
Mastercard’s reported agreement to acquire BVNK, valued at up to $1.8
billion, points to a strategic investment in the settlement layer
connecting stablecoin rails with traditional banking and reflects
growing institutional confidence in stablecoin-enabled cross-border
payments.
Visa’s expansion of stablecoin-backed cards through Stripe’s Bridge to
more than 100 countries reflects a complementary strategy. Rather than
acquiring infrastructure outright, Visa is leveraging its existing
global network as the final distribution layer for stablecoin-funded
payments.
The inclusion of African markets is particularly significant. It signals
growing confidence that stablecoin-backed payment instruments can
operate alongside, and in some cases complement, the mobile money
ecosystems that already dominate wallet-based payments across much of
the continent.
Taken together, these developments point to a broader shift. Card
payment networks are moving from observing the stablecoin conversation
to investing directly in the infrastructure that underpins it. For
Africa, the implication is not that stablecoins will replace existing
payment rails, but that success will increasingly belong to institutions
capable of orchestrating multiple settlement rails – cards, bank
transfers, mobile money and stablecoins, within a unified, interoperable
ecosystem. Local market expertise, regulatory relationships and
last-mile distribution will remain decisive competitive advantages.
Building for scale through trust and regulation
But despite their potential, stablecoins cannot operate outside the
boundaries of regulated financial systems. Their long-term viability
across Africa depends on clear regulatory frameworks, robust compliance
standards and trusted infrastructure that supports transparency, risk
management and consumer protection.
We are already seeing this evolution. In markets such as South Africa,
institutions facilitating cross-border settlements must navigate
increasingly sophisticated regulatory requirements, including approvals
for certain offshore crypto-related activities. Globally, initiatives
such as the OECD’s Crypto-Asset Reporting Framework (CARF) and expanded
Travel Rule obligations are raising expectations around reporting, tax
transparency and compliance.
These developments reinforce a simple reality: stablecoin infrastructure
does not reduce compliance obligations. It raises the bar for
governance, transparency and institutional risk management. The
objective is not to bypass regulation, but to build interoperable
payment systems that can innovate confidently within it.
From the edges to the plumbing
The stablecoin conversation is steadily moving beyond speculation and
towards practical implementation. What once sat at the edges of the
payments debate is becoming part of the plumbing of cross-border finance
rather than a parallel system to it.
The question is no longer whether stablecoins have a role to play in
payments. The question is where they deliver the greatest value. In
Africa, that value is increasingly clear: faster settlement, improved
liquidity efficiency and more connected cross-border commerce. The
winners will not be those that replace existing financial systems, but
those that successfully connect stablecoin rails with the banks, mobile
money networks and payment providers that already power the
continent’s economy.
For pan-African payment networks such as Onafriq, the priority is
ensuring that emerging technologies complement the financial
infrastructure businesses and consumers already trust, rather than
introducing new layers of complexity.
The opportunity lies in connecting stablecoin settlement with banks,
mobile money networks and payment providers, ensuring the benefits of
this new infrastructure deliver tangible outcomes for African businesses
and consumers.
