Stablecoins and Over-the-Counter (OTC) trading are in the spotlight as Africa's Foreign Exchange (FX) landscape evolves.
In a significant turn of events in the global digital finance landscape, Africa has emerged as a pivotal frontier in the surge of stablecoins adoption[1][2]. According to a new report titled "The Rise of OTC and Stablecoins: Africa's Quiet FX Revolution," published by TechCabal Insights in collaboration with Quidax Technologies FZCO, stablecoins now account for 43% of all cryptocurrency transactions in Sub-Saharan Africa[3].
The report illustrates how stablecoins are reshaping settlement and liquidity flows on the continent, with a major evolution in the financial landscape of the region[4]. One of the key findings is the 106% year-over-year growth in OTC trading volumes in 2024, attributed to factors such as foreign exchange (FX) volatility management, slippage reduction for large orders, cross-border transaction simplification, and compliance with local regulatory frameworks[1].
Businesses in Africa are increasingly utilizing OTC desks and stablecoins to facilitate smoother and cheaper cross-border fiat to fiat trades via cryptocurrency. These platforms have significantly reduced settlement times from an average of five days to just a few minutes, also cutting FX costs by up to 2% per transaction[1].
Countries like Nigeria, Ethiopia, and Zambia have seen a notable increase in stablecoin adoption. Nigeria ranks second globally in crypto transaction volumes, with over $59 billion processed last year, while Ethiopia and Zambia each experienced more than 100% year-over-year growth in stablecoin inflows[1].
Stablecoins, such as USDT and USDC, are widely used to lock in stable exchange rates, helping users avoid FX volatility common in many Sub-Saharan African economies[1]. The combined effect of OTC trading and stablecoins is described as a "quiet FX revolution," enabling faster, cheaper, and more compliant foreign exchange alternatives using crypto infrastructure, with growing adoption both at the retail and institutional levels across the continent[1].
For those interested, the full report can be accessed here. The report uses proprietary data and interviews with market leaders to provide a comprehensive understanding of the current state of stablecoin and OTC cryptocurrency trading in Sub-Saharan Africa. The OTC desk link is available here.
[1] TechCabal Insights and Quidax Technologies FZCO. (2024). The Rise of OTC and Stablecoins: Africa's Quiet FX Revolution. [2] Quidax Technologies FZCO. (2024). Press Release: New Report Reveals Africa's Quiet FX Revolution. [3] Quidax Technologies FZCO. (2024). Blog Post: Africa's Quiet FX Revolution: The Rise of Stablecoins. [4] TechCabal Insights. (2024). The State of African Crypto Markets: A Deep Dive into the Numbers.
%20trading%20are%20in%20the%20spotlight%20as%20Africa's%20Foreign%20Exchange%20(FX)%20landscape%20evolves.){kind=link}