How stablecoins are transforming Africa's financial landscape

"STABLECOINS are brilliant, espe-cially in Africa. They solve cross-border payment issues and remittances, which can cost up to 20% in Africa. Ata company I'm the Co-Founder of, Xago, we've built stablecoins for 6 differ-ent currencies (USD, ZAR, Euro, AUD, Pound and NGN), sending transactions in seconds for pennies," said Sonya Kuhnel, the managing director and co-founder of Bitcoin Events, in an interview with Business Report executive editor Philippa Larkin on Friday.

- PHILIPPA LARKIN

The interview was held a week before Bitcoin Events upcoming virtual Strategic Bitcoin Reserve Summit. Bitcoin Events hosts several Web3 events including Africa's first and largest blockchain conference, the renowned Blockchain Africa Conference.

The inaugural event is testing the waters for discussions around Bitcoin as a national asset and is also a sign how far digital currencies have progressed as they transform the financial landscape in the move away from fiat money.

Fiat money is government-issued currency.

Kuhnel, an entrepreneur and educator in the blockchain and cryptocurrency sectors, said that inspired by US developments it’s the first time their company is tackling this theme, with speakers from the United States leading the charge on state-level Bitcoin reserves.

"Bitcoin’s king for value storage, but stablecoins solve payments. Our summit showcases these global trends to educate Africans on opportunities and challenges," she added.

Regulation’s key, though, "South Africa's classified crypto as a financial product, but we need more clarity.”

She explained that the US is ahead in regulation of stablecoins, embracing Tether and Circle. Bitcoin’s a store of value, up 628 782% in 10 years, but stablecoins are for payments.

Kuhnel emphasised that stablecoins drive digital inclusion in payments and is already becoming a game changer for Africa with one of the highest adoption rates in the world.

What is stablecoin?

According to the World Economic Forum (WEF), a stablecoin is a type of cryptocurrency that is pegged to a specific reserve asset.

By being linked to an underlying asset, stablecoins can maintain a steadier value, making them a more reliable medium of exchange than other volatile cryptocurrencies.