As inflation, currency depreciation and foreign exchange shortages continue to strain African economies, stablecoins are increasingly emerging as a preferred tool for savings, payments and cross-border trade, prompting fresh concerns about their long-term implications for financial stability and monetary policy.
The International Monetary Fund (IMF) said the rapid adoption of dollar-backed stablecoins such as USDT and USDC, particularly in inflation-hit economies such as Nigeria, is beginning to challenge monetary sovereignty.
In its report, Stablecoins in Nigeria: A Growing Cross-Border Channel, the IMF said the growing shift by individuals and businesses to dollar-linked stablecoins is weakening demand for local currencies and reducing the effectiveness of central banks' monetary policies.
The report notes that, in some African markets, up to 95% of surveyed users now prefer receiving payments in stablecoins rather than local fiat currencies.
ITWeb Africa interviewed industry experts to assess whether the next currency crisis could propel stablecoins from a niche asset into a parallel financial system across Africa.
Rahul Sahni, chief business officer and COO at TransFi, said stablecoins already serve as a "working dollar substitute" in several African markets, where businesses use dollar-pegged tokens to preserve value and settle cross-border trade.
He noted that Sub-Saharan Africa received more than $205 billion in on-chain value in the year to June 2025, with stablecoins accounting for 43% of transactions, while Nigeria's early-2025 naira devaluation pushed monthly volumes to about $25 billion.
"Calling stablecoins Africa's digital dollar overstates the case," Sahni said. "National currencies remain primary, but these assets provide practical dollar liquidity where traditional banking falls short."
Bernardo Brites, co-founder and CEO of Trace Finance, believes stablecoins are already evolving into a de facto parallel currency in inflation-hit markets such as Nigeria, even if they are unlikely to replace national currencies outright.
Brites said economic hardship has transformed dollar-backed stablecoins from speculative investments into financial lifelines, with many users using them for savings, remittances and cross-border payments.
Dunsin Fatuase, AI governance expert and AI & Platform Engineer at The Stepstone Group, agreed that economic necessity is the primary driver but warned another currency crisis could accelerate adoption.
"Stablecoins are already functioning as a parallel financial layer in Africa. However, they are unlikely to replace local currencies in everyday economic activity in the near term," he said.
Rather than restricting their use, experts urged regulators to establish clear rules.
"Stablecoins and national currencies can absolutely coexist," said Ryan Kirkley, CEO and co-founder of Global Settlement Network.
"The most constructive approach is clear regulation around consumer protection, reserve transparency and compliance rather than stopping innovation," he said.
Artificial intelligence is also expected to play a growing role in oversight.
While Brites said AI is already transforming transaction monitoring and sanctions screening, Kirkley added that the technology enables financial institutions to identify suspicious activity in real time.
However, Nosike Nwigene, AI governance and RegTech expert, said AI "can do more than catch bad actors" and should help regulators understand when their own policies push people and capital away or weaken confidence.
He said the real innovation lies in using data to build a more stable financial system, rather than simply expanding surveillance.
Nosike argued that African central banks are focusing on the wrong problem.
"The biggest risk is not stablecoins. It is weak monetary policy that pushes people towards them in the first place," he said, urging policymakers to strengthen confidence in local currencies and introduce proportionate safeguards for digital assets rather than banning them.
Looking ahead, Sahni expects a hybrid future in which stablecoin infrastructure increasingly powers cross-border settlements while traditional banking networks continue to handle institutional finance, with regulatory clarity and stronger payment infrastructure determining the pace of adoption.
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