Absa and CV VC reveal details in their latest Africa Blockchain Report
Africa's blockchain sector is currently experiencing a surge in growth, particularly in the adoption of stablecoins. According to the latest Africa Blockchain Report, presented by Absa and CV VC Africa, stablecoins now represent about 43% of cryptocurrency deals in Africa, making them a dominant force in the continent's crypto market.
This trend is driven by several factors. Financial inclusion and foreign exchange shortages are common challenges in many African countries. Stablecoins provide a reliable alternative currency, helping businesses to operate and local economies to strengthen. Cross-border payments and remittances are another area where stablecoins shine. Africa's cross-border payments market is expected to reach $329 billion by 2025 and over $1 trillion in the long term. Stablecoins reduce remittance fees and speed up transactions, replacing costly traditional channels.
High cryptocurrency penetration is another factor fueling this growth. Nigeria, leading Africa in crypto adoption, processed $59 billion in crypto transactions (July 2023-June 2024) with stablecoins accounting for a substantial share. South Africa shows strong institutional uptake, while Kenya advances blockchain integration with mobile money and decentralized finance (DeFi).
Regulatory momentum is also playing a crucial role. Countries like Ghana are formalizing crypto licensing frameworks to regulate platforms, providing clearer oversight amid growing adoption, which supports market stability and user confidence.
The African blockchain sector is considered a promising frontier. Its youthful, tech-savvy population is embracing these technologies to address real economic challenges like inflation, currency instability, and financial exclusion. Blockchain-based solutions powered by stablecoins are fundamentally reshaping financial services by making them more accessible, affordable, and efficient.
The median blockchain deal size in Africa reached $2.8 million, twice the all-sector median and a 10% year-on-year increase. This indicates a growing interest and confidence in blockchain technology among investors. The Africa Blockchain Report 2024 also shows a shift from hype-driven crypto investments to more grounded applications of blockchain technology.
Notably, Nigeria's rebound in blockchain funding was significant following a regulatory thaw in 2024. South Africa continues to attract investors due to its regulatory clarity and stable financial infrastructure. Seychelles accounted for nearly a third of funding, partly due to its tax and legal advantages for global companies.
The report projects that within the decade, more Africans may transact in stablecoins than through bank accounts. This prediction is based on trends related to mobile-first adoption, currency volatility, and limited access to traditional banking.
African startups are pioneering blockchain solutions in sectors beyond finance, such as supply chains, agriculture, mining, and ESG. One example is Shamba Records, an agri-tech firm in East Africa, which uses blockchain to help smallholder farmers build verifiable yield data, gain access to insurance, and increase incomes.
Centralised financial services and decentralised finance (DeFi) together made up over 70% of blockchain investment in Africa. However, institutional clients in Africa are using stablecoins for settlement and liquidity management, but they are not broadcasting it.
Rob Downes, Head of Digital Assets at Absa CIB, noted that stablecoins are fast becoming an integral part of Africa's financial systems without the visibility of traditional reporting. This dynamic environment, combined with supportive government policies and vibrant startup ecosystems, positions Africa as a key hub for blockchain innovation and investment.
- The surge in growth within Africa's blockchain sector is primarily driven by factors such as financial inclusion, foreign exchange shortages, and the need to address real economic challenges like inflation and financial exclusion.
- Cross-border payments and remittances are areas where stablecoins excel, as they reduce remittance fees, speed up transactions, and offer a reliable alternative currency, especially in regions where traditional channels are costly.
- The Africa Blockchain Report 2024 shows a shift from hype-driven crypto investments to more grounded applications of blockchain technology, with notable examples being Nigerian blockchain funding increase following a regulatory thaw, and South Africa continuing to attract investors due to its stable financial infrastructure.
- Beyond finance, African startups are pioneering blockchain solutions in sectors such as supply chains, agriculture, mining, and environmental, social, and governance (ESG), with one example being Shamba Records, an agri-tech firm in East Africa that uses blockchain to help smallholder farmers build verifiable yield data, gain access to insurance, and increase incomes.
