African businesses turn to stablecoins for cross border trade

According to TechCabal, stablecoins are giving African businesses an alternative way to pay overseas suppliers, but costs, security concerns and fragmented blockchain networks remain obstacles to wider use. Industry executives shared these insights at Moonshot by TechCabal in Lagos.

Speaking on a panel titled, "Where Are Stablecoins Creating Real Value in Africa?", representatives from Solana Superteam Nigeria, Obiex and Hyperbridge said demand was driven by practical difficulties in accessing foreign currency and completing international payments. Chinonso Obiefule, lead at Solana Superteam Nigeria, said some Nigerian businesses were already using stablecoins to pay suppliers in China when dollars were difficult to obtain through conventional channels. People want to access dollars, but they cannot do so because dollars are not easily accessible, making stablecoins the next best option.

Payments and Challenges

The appeal extends beyond access to foreign currency. Odinaka Esiagu, head of customer success and operations at Obiex, said businesses trading across time zones also need to move funds outside banking hours. A company buying goods from a Chinese supplier might need to complete a payment while its bank was closed, and stablecoins allow fund transfers without waiting until the next banking day. Esiagu noted that the technology improves transaction flexibility rather than eliminating the need for banks.

This discussion reflected the growing role of dollar-linked digital assets in Nigeria's financial system. According to the IMF, the country received about $59 billion in crypto-asset inflows between July 2023 and June 2024. That figure covers crypto assets broadly, and the fund estimates that Nigeria has accounted for roughly 60 per cent of stablecoin inflows into sub-Saharan Africa since 2019.

Network Costs and Security

For businesses, a new payment channel must offer more than availability. Obiefule said developers needed to make international transfers cheaper, safer and easier to use, adding that low blockchain transaction fees were an important consideration for companies choosing which networks to use. Trust remained another constraint, as Esiagu stated that reports of cryptocurrency platforms being hacked continued to deter potential customers. Obiex was developing a service to help businesses build stablecoin-based products by providing technical and compliance-related support.

Seun Lanlege, chief executive of Hyperbridge, said fragmentation across blockchains created a further challenge because funds available on one network were not necessarily accessible on another. Lanlege said Hyperbridge provided infrastructure for moving tokens between networks, while its HyperFX product used those connections to facilitate transactions across blockchain ecosystems. Such systems needed to prioritise security and decentralisation, he argued, warning that reliance on centralised intermediaries could create vulnerabilities.

Regulation also remains central to the market's development. The IMF has called for clearer treatment of stablecoin issuers in Nigeria, alongside stronger oversight and better data on how digital assets interact with the domestic financial system. It has warned that widespread use of dollar-denominated stablecoins could weaken monetary policy transmission and create financial integrity risks.