Altcoins News
By James Thorp
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Stablecoin users across Africa get hammered by conversion costs. A new study from Borderless.
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The January analysis looked at 66 stablecoin routes across Africa and tracked nearly 94,000 rate observations. Results weren't pretty.
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Botswana takes the crown for worst rates.
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The country's single stablecoin provider charges nearly 19.5% to convert USDC or USDT into local pula. South Africa sits at the other end with reasonable 1.
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Competition drives everything here. South Africa's competitive market keeps median spreads at just 152 basis points.
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Zambia and Tanzania show how provider choice matters for your wallet. In Zambia, the gap between cheapest and most expensive conversion hit 650 basis points.
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The study also compared stablecoin rates against traditional bank foreign exchange. Globally, stablecoins cost just 5 basis points more than interbank rates.
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Stablecoin premiums over bank rates hit 119 basis points across the continent. Botswana actually beats bank rates despite its high stablecoin spreads.
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Borderless.xyz CEO Alex Nyaga didn't mince words about the findings. "The lack of competition in many African markets allows providers to set disproportionately high spreads," he…
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The African Fintech Alliance jumped on the issue in early February. The group announced plans to link local fintech firms with international stablecoin providers.
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But it's not just individual traders getting squeezed. The African Chamber of Commerce reported in January that small businesses in Ghana and Kenya struggle with operational…
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Kenya's Central Bank took notice. On February 8, the bank said it's exploring regulatory frameworks to attract more stablecoin providers.
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International bodies are watching too. The International Monetary Fund released a statement February 9 expressing concern over African stablecoin spreads.
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The African Development Bank announced February 10 it might fund digital currency education initiatives.
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Nigerian fintech Paystack launched its own awareness campaign February 11. The company wants to educate users about stablecoin advantages and pitfalls for remittances.
The Currency Analytics
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