When a South African business pays a supplier in Malawi, the money often takes a detour through the global financial system. Instead of moving directly across the continent, the payment is often routed through correspondent banks and the United States (US) dollar before reaching its destination.
It’s a paradox at the heart of the African Continental Free Trade Area (AfCFTA), Africa’s flagship trade pact. While the agreement seeks to boost trade across Africa, the continent’s payment infrastructure still reflects an era when African economies traded more with Europe, the United States and Asia than with one another.
That disconnect is fuelling renewed interest in stablecoins, led by Nigeria and South Africa, not as speculative crypto assets, but as digital settlement infrastructure that could make cross-border African trade faster, cheaper and more predictable.
The shift comes as South Africa continues to trade far more with markets outside the continent than within it. Only about 15% to 18% of South Africa’s trade is with African countries, highlighting how much work remains before AfCFTA can achieve its ambitions.
“Payments become the friction that businesses feel every single day,” Ifelade Ayodele, chief executive officer (CEO) of Blaaiz, a cross-border remittance platform, told TechCabal in an interview on Tuesday. “Once goods have crossed the border, invoices still need to be settled, suppliers need to be paid, currencies need to be converted, and liquidity needs to move efficiently. If those processes remain slow, expensive or unpredictable, the commercial benefits of trade are significantly reduced.”
According to Ayodele, Africa’s payment infrastructure still reflects a continent built to trade with the rest of the world rather than with itself. For decades, African economies exported commodities to Europe, Asia and the US, so banks, payment networks and settlement systems evolved to support those trade routes. As a result, payments between neighbouring African countries often still pass through correspondent banks and intermediary currencies, usually the US dollar.
“The challenge isn’t moving information quickly,” he said. “It’s moving value efficiently across fragmented markets.” That is where stablecoins are beginning to reshape the conversation in Africa. Fintechs such as South Africa’s Onafriq, pan-African stablecoin infrastructure provider Yellow Card and Nigeria’s Flutterwave are increasingly using stablecoins behind the scenes to settle cross-border transactions. The result is that businesses can move money across Africa almost instantly while customers often remain unaware that blockchain technology is powering the payment.
“Stablecoins are already being used for cross-border payments and settlements,” Dr. Wiehann Olivier, Partner and Global Co-Head of Digital Assets at Forvis Mazars, a digital assets advisory firm, also told TechCabal on Tuesday. “In many cases, customers aren’t even aware that stablecoins are being used behind the scenes to facilitate their transactions.”
Olivier said the attraction lies in dramatically lower costs and near-instant settlement. “A payment from South Africa to Malawi can be converted into a US dollar-backed stablecoin, transferred in seconds, and exchanged for local currency at a fraction of the cost of correspondent banking,” he said.
“Stablecoins remove friction from cross-border payments. You are moving from one currency to a stablecoin and then into another currency within seconds.” Neither expert believes stablecoins will replace banks or existing payment infrastructure.
Ayodele maintains that the real opportunity is interoperability, not speed. He stated that businesses trading across Africa still contend with fragmented banking systems, multiple currencies and disconnected payment rails, making cross-border commerce slower and more expensive than it should be.
Connecting those systems would reduce settlement costs, free up working capital and make it easier for businesses to trade across the continent. “The bigger opportunity is improving interoperability between financial systems,” he said, “reducing reliance on intermediary currencies where appropriate, enabling more efficient liquidity management, and giving businesses greater transparency and predictability when moving money across borders.”
Olivier agreed that stablecoins are another settlement layer rather than an alternative financial system. “The biggest remaining challenge is interoperability,” he said. “Stablecoins offer an efficient settlement layer that can connect fragmented payment ecosystems.”
The big obstacle, however, may not be technology but regulation. While South Africa has introduced a regulatory framework for crypto asset service providers, several African countries, including Nigeria, Kenya, Ghana, and Mauritius, are following suit. Olivier believes exchange control laws, not crypto regulations, remain the biggest barrier to wider adoption.
“The bigger challenge lies beyond crypto regulation,” he said. “It lies in exchange control legislation.”
Both Ayodele and Olivier agree that AfCFTA’s success will depend as much on how money moves as how goods move. Stablecoins may not replace banks, but they could become the invisible infrastructure that finally makes African trade feel truly borderless.
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