Stablecoin

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Stablecoin transactions now comprise nearly half of the total transaction volume in Sub-Saharan Africa, largely due to currency devaluation.
Stablecoins account for approximately 43% of the Sub-Saharan African region’s total transaction volume, according to Chainalysis’ latest report on the African crypto scene published on Oct. 2.&nbsp;
“We have repeatedly noted an association between currency devaluation and stablecoin adoption,” Eric Jardine, Cybercrimes Research Lead at Chainalysis, told Cointelegraph.&nbsp;
He added that the key to understanding this association “is the direction of the causal arrow, which points from deteriorating purchasing power in local fiat terms to USD stablecoin adoption.”
<blockquote>
 “What this means is that it is reasonable to assume that stablecoin adoption will grow rapidly whenever local currencies lose their value, but that stablecoin use can also grow fast outside of these circumstances.”
</blockquote>
<figure><img alt="Stablecoins now 43% of Sub-Saharan Africa crypto tx volume: Chainalysis" name="" src="https://s3.cointelegraph.com/uploads/2024-10/01924b64-da75-7efa-a373-caeb53859705">
 <figcaption style="text-align: center;">
 Total stablecoins received by Sub-Saharan African nations. Source: Chainalysis
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</figure>
The blockchain research firm also <a data-ct-non-breakable="null" href="https://www.chainalysis.com/blog/subsaharan-africa-crypto-adoption-2024" rel="noopener noreferrer nofollow" target="null" text="null" title="null">reported</a> that Nigeria has maintained its position as a top global player for crypto adoption.
The findings revealed that <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/binance-ceo-calls-nigeria-release-binance-exec" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Nigeria</a> received approximately $59 billion in crypto transaction volume between July 2023 and June 2024.
Additionally, about 85% of the value of transfers received in Nigeria are under $1 million, indicating a dominance of smaller retail and professional-sized transactions, it revealed.&nbsp;
Nigeria also ranked as the country with the most total stablecoins received, which has seen significant <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/cryptocurrency-as-a-hedge" rel="noopener noreferrer nofollow" target="null" text="null" title="null">devaluation</a> in the Naira.&nbsp;
“The banks don’t have dollars, the government doesn’t have dollars, and even if they did, they wouldn’t give them to you, said co-founder and CEO of African crypto exchange Yellow Card, Chris Maurice.
<figure><img alt="Stablecoins now 43% of Sub-Saharan Africa crypto tx volume: Chainalysis" name="" src="https://s3.cointelegraph.com/uploads/2024-10/01924b56-ea2e-7b4b-af8e-19a0cf89fc45">
 <figcaption style="text-align: center;">
 Naira value against stablecoin transaction volume. Source: Chainalysis
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</figure>
“As the naira depreciates, we can see a rise in stablecoin inflows for transactions under $1 million, with more pronounced activity during periods of significant currency devaluation,” confirmed Chainalysis.&nbsp;
A similar situation is unfolding in <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/nfts-blockchain-ethiopia-art-exhibition" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Ethiopia</a>, which is ranked 26th in terms of crypto adoption, according to Chainalysis.&nbsp;
Ethiopia is currently Africa’s fastest-growing market for retail-sized stablecoin transfers, with a 180% year-over-year growth.
In July, the Ethiopian birr (ETB) lost 30% of its value after the government eased currency restrictions in an <a data-ct-non-breakable="null" href="https://www.reuters.com/markets/currencies/ethiopia-shifts-market-based-foreign-exchange-system-2024-07-29/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">attempt</a> to secure International Monetary Fund (IMF) support.&nbsp;
Maurice added that stablecoins are a proxy for the dollar. “If you can get into USDT or USDC, you can easily swap that into hard dollars elsewhere,” which has made stablecoins indispensable for companies involved in international trade.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/south-africa-digital-asset-hub-crypto-compliance-fsca" rel="noopener noreferrer nofollow" target="null" text="null" title="null">African economies show high potential for digital asset adoption</a>
Rob Downes of financial services firm Absa Group noted a similar trend among institutional clients in <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/south-africa-begins-licensing-crypto-exchanges-applications-pile-up" rel="noopener noreferrer nofollow" target="null" text="null" title="null">South Africa</a>, stating that stablecoins were a “game changer.”&nbsp;
“Our institutional clients are particularly interested in using stablecoins as a tool for managing liquidity and reducing exposure to currency volatility,” he said.
Additionally, stablecoins have displaced Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow" target="null" text="null" title="null">BTC</a>) as the most popular cryptocurrency received in <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/cryptocurrency-regulations-in-south-africa" rel="noopener noreferrer nofollow" target="null" text="null" title="null">South Africa</a> in recent months, Chainalysis noted.&nbsp;
<figure><img alt="Stablecoins now 43% of Sub-Saharan Africa crypto tx volume: Chainalysis" name="" src="https://s3.cointelegraph.com/uploads/2024-10/01924b57-8cf6-7bb9-83c5-79931087bb7b">
 <figcaption style="text-align: center;">
 Stablecoin value received surpasses BTC in South Africa. Source: Chainalysis
 </figcaption>
</figure>
Chainalysis concluded that Africa’s real-world crypto use cases “carry valuable lessons for the global market” before adding that the continent is “well-positioned to emerge as a global crypto leader.”&nbsp;
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/binance-cz-prison-caroline-ellison-alameda-research-hodlers-digest/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">CZ walks free, Caroline Ellison receives prison sentence, and more: Hodler’s Digest, Sept. 22 – 28</a>

Stablecoins now 43% of Sub-Saharan Africa crypto tx volume: Chainalysis

Cointelegraph

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