A number of African countries are exploring the use of stable coins for cross-border payments, in a bid to mitigate pressures emanating from shortage of hard currency, such as the US dollar, the Sterling Pound and the Euro, in their economies.

 

A stable coin refers to a digital asset whose value is backed by a reserve asset, which often is the currency of the country in which the stable coin applies.

Payments multinational Visa says that the viability of stable coins as a measure to circumvent periodic shortage of hard currency is one of the use cases of the digital asset that is most popular among African countries seeking its solutions.

Shortages of hard currency usually occur in episodes where major central banks hike their policy rates considerably, thereby triggering capital flight from emerging and frontier markets, which precipitates a dry up of the world’s major currencies in those markets.

According to Mr Berner, the ability to facilitate cross-border payments while not undermining a country’s foreign exchange reserves position is the strongest selling point for African economies that are looking to harness stable coins as a solution.

In the period between 2022 and 2024 when global interest rates were on a steady rise, a number of African economies grappled with acute shortage of hard currency and adopted interventions such as Kenya’s government-to-government sourcing of petroleum product to stabilise US dollar liquidity.

Kenya’s government-to-government sourcing of petroleum product on credit terms was an intervention adopted in March 2023 with the aim of addressing the monthly $500 million demand by oil marketing companies to service import requirements.“I would not be able to disclose but we talk to many banks, we talk to regulators and merchants about crypto backed settlement. It does not undermine the foreign exchange position of the country; it does not present a tough decision for the Central Bank as to how to fund imports so we see that this is likely to be adopted more and more,” Mr Berner says.

So far, PAPSS has 20 participating Central Banks, 12 participating switches and 51 participating banks across the continent.

The International Monetary Fund (IMF) has been at the forefront of those advocating for adoption of stable coins for cross-border payments.“Today, most stable coin turnover relates to trading native crypto assets as they are used for settlement in traditional currencies. However, stable coins cross border flows are growing fast. Stable coins could enable faster and cheaper payments, particularly across borders and for remittances where traditional systems are often slow and costly”, the IMF says in its December 2025 paper on the role of stable coins in global payments.

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