Biggest African economies lead stablecoin demand growth, study shows

By Colleen Goko

JOHANNESBURG, Feb 18 (Reuters) - Africa's biggest economies Nigeria and South Africa are driving the strongest maturation successful request for stablecoins and are the astir optimistic astir their potential, ‌a survey found, with galore users besides wanting them to go much wide accepted.

Stablecoins are promising ‌faster and cheaper ways to determination wealth successful poorer countries, but arsenic 99% of them, including the ascendant Tether and USDC, are ​pegged to the dollar, they besides rise worries astir economical dollarisation and superior flight.

The survey, titled the Stablecoin Utility Report and conducted by YouGov with crypto firms BVNK, Coinbase and Artemis, took the views of much than 4,650 individuals from 15 countries who either hold, oregon program to hold, stablecoins oregon cryptocurrencies.

The usage of the coins contiguous ‌is mostly for moving wealth betwixt ⁠cryptocurrency markets. Nearly nine-tenths of stablecoin transactions subordinate to crypto trading, portion conscionable 6% are for outgo of goods oregon services, BCG estimated successful a study past year.

PREFERENCE ⁠FOR STABLECOIN PAYMENTS

The report, which besides recovered increasing request for stablecoins successful different emerging countries specified arsenic India, showed implicit fractional of those surveyed had accrued stablecoin holdings successful the past year, with processing economies seeing the strongest trends.

Almost ​80% ​of Nigerian and South African respondents already held stablecoins, the ​figures showed, with implicit 75% of those ‌also intending to summation their holdings further successful the coming year.

Among non-owners, the intent to commencement holding stablecoins was astir doubly arsenic precocious successful debased and middle-income economies than successful high-income ones, with 95% of Nigerian respondents saying they would similar to person payments successful stablecoins than successful the Naira.

"People are already getting paid and spending stablecoins, particularly wherever accepted payments are slow, expensive, oregon unreliable," said Chris Harmse, co-founder of BVNK.

But they ‌are besides "asking for greater integration into their existing fiscal tools," ​he added.

THREAT TO MONETARY POLICY

Globally, the stablecoin marketplace is valued ​at much than $310 billion, dominated by U.S.-pegged tokens ​such arsenic Tether ($185 billion) and USDC ($75 billion). The marketplace is expected to grow further ‌following U.S. regulatory moves, specified arsenic the GENIUS ​Act.

However, cardinal bankers successful emerging ​economies stay cautious. They fearfulness stablecoins could drain home slope deposits, undermining monetary policy, portion facilitating superior flight.

South African Reserve Bank Governor Lesetja Kganyago pointed retired a imaginable benefit, noting remittance fees ​as precocious arsenic $30 to nonstop $100 to ‌neighboring Mozambique, a spread stablecoins could assistance address.