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Is Traditional Banking Having a Makeover?

The role of stablecoins in driving financial growth in Africa

        In recent years, cryptocurrencies, especially stablecoins have rapidly gained traction as a driving force in the world of finance, increasingly positioning themselves as a key innovation that could reshape traditional banking and finance. As the global financial landscape gravitates toward more efficient and inclusive solutions, stablecoins are emerging as a powerful alternative to traditional banking by delivering seamless cross-border transactions, low-cost remittances, and instant settlements. Top banks, including Goldman Sachs, JP Morgan, Signature, and others, use blockchain solutions for multiple purposes, from cross-border payments to foreign currency trades. But what does this shift mean for businesses, consumers, and the financial ecosystem, especially in Africa?

Stablecoins and Traditional Banking: An Ideal Marriage?

        In the last decade, banking has been on a revolutionary high in terms of technological adoption and this has changed how companies approach finance, allowing traditional banks to collaborate with fintechs and offer financial products directly to customers. However, with stablecoins like USDC, USDT and more recently Africa-focused stablecoins like and AFRO, the accessibility, speed, and affordability of transactions are now challenging banking solutions. Stablecoins provide a borderless, low-cost digital currency that enables instant transactions without the need for intermediaries, saving time and making financial services more accessible.

How Stablecoins Are Enhancing Inclusive and Accessible Financial Services in Africa.

         Stablecoins, often pegged to major fiat currencies like the US dollar, offer the best of both worlds: the stability of traditional currency and the innovation of digital assets. The impact is felt globally, but it’s particularly powerful in emerging economies like Nigeria and Kenya, where remittances and cross-border payments play a crucial economic role. With 63% of Africa’s population unbanked, there is enormous untapped potential for the further adoption of blockchain-based solutions as an alternative to traditional payment options

       In 2024 alone, the IMF and World Bank reported a 15% reduction in cross-border remittance costs for stablecoin-supported transactions across African markets. This decrease in costs not only saves money but also makes financial inclusion more achievable for underserved populations.     

        For Africa, stablecoins hold particular promise by reducing dependence on volatile local currencies and enabling faster, less expensive transactions across borders. Today, roughly 33% of Nigerians own or use cryptocurrency and over 70% of these crypto users leverage stablecoins for cross-border payments, saving time and money compared to traditional banking channels. As stablecoins provide a decentralized alternative, they also allow users to avoid high remittance fees and fluctuating exchange rates—challenges that have long hindered financial growth in many African nations.

       In developed countries, stablecoins are also revolutionizing the financial landscape by simplifying B2B transactions, enabling faster supply chain settlements, and allowing for real-time payroll distribution, even across borders. This ripple effect is setting the stage for a future where crypto and stablecoins coalesce with mainstream finance for improved efficiency and inclusivity worldwide.

The Power of Stablecoin Integration

  1. PayPal’s USD Stablecoin: Earlier this year, Paypal launched its USD-backed stablecoin PYUSD, which has already been integrated into its platform, allowing users worldwide to make seamless, instant transactions. By incorporating stablecoin transactions, PayPal has expanded its offering to meet the needs of a new generation of crypto users and demonstrated a clear path for Web2 companies to adapt to blockchain innovations.
  2. Visa’s Stablecoin Experimentation: Visa made headlines in 2024 with its pilot program to use USDC on the Ethereum blockchain for settling transactions with global partners. Through this integration, Visa significantly reduced the complexities and costs associated with cross-border payments, creating a framework that other companies can emulate. They went on to create the Visa Onchain Analytics Dashboard which according to the company ‘is designed to be an easily-digestible, freely-available window into publicly-available aggregated blockchain data, beginning with stablecoins’.
  3. African Fintech Adopters: In Africa, companies like Flutterwave and Chipper Cash are exploring stablecoin integrations to overcome currency volatility and facilitate affordable cross-border transactions. This step not only supports Africans in sending and receiving money but also provides a safe hedge against inflation in countries like Nigeria and Zimbabwe, where currency value can be unpredictable.

What Does the Future Hold?

        While blockchain solutions have enabled financial inclusion and opened doors for non-financial institutions to deliver banking services, stablecoins are taking it a step further, enabling people globally to transact freely, affordably, and securely. As regulatory frameworks around stablecoins evolve, the potential for mainstream adoption grows. In Africa stablecoins present a unique opportunity to leapfrog traditional financial infrastructure and establish a more accessible and resilient system. This innovative technology can foster intra-continental trade and facilitate integration with global markets.

         Stablecoins are gradually becoming the backbone of digital payments, offering stability, transparency, and accessibility, which are foundational to the next phase of financial innovation. As more organizations integrate these solutions, the lines between traditional and decentralized finance will continue to blur, offering a glimpse into a more inclusive financial future for us all.

       If you’re interested in exploring how stablecoins and other blockchain innovations can transform your bank, fintech or business, you can check out the Quidax Crypto API  to learn how you can integrate these solutions and prepare for the future of finance.

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