Biggest African economies lead stablecoin demand growth, study shows

By Colleen Goko

JOHANNESBURG, Feb 18 (Reuters) – Africa’s biggest economies Nigeria and South Africa are driving the strongest growth in demand for stablecoins and are the most optimistic about their potential, a survey found, with many users also wanting them to become more widely accepted.

Stablecoins are promising faster and cheaper ways to move money in poorer countries, but as 99% of them, including the dominant Tether and USDC, are pegged to the dollar, they also raise worries about economic dollarisation and capital flight. 

The survey, titled the Stablecoin Utility Report and conducted by YouGov with crypto firms BVNK, Coinbase and Artemis, took the views of more than 4,650 individuals from 15 countries who either hold, or plan to hold, stablecoins or cryptocurrencies.

The use of the coins today is largely for moving money between cryptocurrency markets. Nearly nine-tenths of stablecoin transactions relate to crypto trading, while just 6% are for payment of goods or services, BCG estimated in a report last year.

PREFERENCE FOR STABLECOIN PAYMENTS

The report, which also found growing demand for stablecoins in other emerging countries such as India, showed over half of those surveyed had increased stablecoin holdings in the last year, with developing economies seeing the strongest trends.

Almost 80% of Nigerian and South African respondents already held stablecoins, the figures showed, with over 75% of those also intending to increase their holdings further in the coming year. 

Among non-owners, the intent to start holding stablecoins was roughly twice as high in low and middle-income economies than in high-income ones, with 95% of Nigerian respondents saying they would prefer to receive payments in stablecoins than in the Naira.

“People are already getting paid and spending stablecoins, especially where traditional payments are slow, expensive, or unreliable,” said Chris Harmse, co-founder of BVNK. 

But they are also “asking for greater integration into their existing financial tools,” he added.

THREAT TO MONETARY POLICY

Globally, the stablecoin market is valued at more than $310 billion, dominated by U.S.-pegged tokens such as Tether ($185 billion) and USDC ($75 billion). The market is expected to expand further following U.S. regulatory moves, such as the GENIUS Act.

However, central bankers in emerging economies remain cautious. They fear stablecoins could drain domestic bank deposits, undermining monetary policy, while facilitating capital flight.

South African Reserve Bank Governor Lesetja Kganyago pointed out a potential benefit, noting remittance fees as high as $30 to send $100 to neighboring Mozambique, a gap stablecoins could help address.

The survey also highlighted limited acceptance of stablecoins in shops and online as a hurdle to broader adoption for everyday purchases and subscriptions.

(Reporting by Colleen Goko; Editing by Marc Jones and David Holmes)