Crypto OTC: The "Invisible Engine" of Stablecoin Payments in Africa

Written by: Will A-Wang

"Small cryptocurrencies, currency-stricken countries," is essentially synonymous with African nations. For companies planning to enter the African market, the complexity of the local financial environment—banking system restrictions, exchange rate fluctuations, regulatory uncertainties—often feels daunting. These obstacles not only hinder daily operations but also deter potential investors. Thus, seeking alternative solutions has become a necessity; in recent years, blockchain-based cryptocurrency channels have been increasingly adopted by many enterprises.

As discussed in our previous article "Stablecoin Payments and Global Capital Flow Models," while stablecoins vividly demonstrate the core capability of blockchain to "instantaneously transfer funds and value," payments extend far beyond the "peer-to-peer transfer" stage. Just like in a stablecoin sandwich, although blockchain replaces traditional payment channels for horizontal value/fund transmission, the endpoints still rely on outdated financial payment systems, necessitating a return to the banking financial account systems of the target country's market.

Thus, cryptocurrency over-the-counter (OTC) trading has become a core component for stablecoin payment companies, especially for these African "small cryptocurrencies, currency-stricken countries." The lack of local financial infrastructure and the ineffectiveness of traditional channels have spurred the vigorous development of the crypto OTC market, whose efficient deposit/withdrawal services allow corporate funds to flow safely and quickly between fiat currencies and stablecoins.

As Africa and the world accelerate their embrace of digital innovation, cryptocurrency/stablecoin payment channels provide opportunities for companies to expand in a rapidly changing market.

Consequently, we have compiled a report from the African stablecoin payment company Quidax (a.k.a. local OTC service provider in Africa) titled The Rise of OTC and Stablecoins: Africa's Quite FX Revolution, revealing how global enterprises leverage cryptocurrency OTC trading to simplify settlements, gain liquidity, and confidently expand into the African market, providing a strategic overview. The report is based on regional insights, market trends, and operational realities, aimed at decision-makers, financial executives, and funding teams, helping them navigate the evolving cryptocurrency landscape in Africa under compliant and clear conditions. Notably, interviews with several leading figures in Africa's crypto industry are particularly compelling.

Executive Summary

Over-the-counter (OTC) cryptocurrency trading is rapidly becoming a key force for global enterprises to "seamlessly participate" in Africa's digital financial ecosystem. By conducting large-scale peer-to-peer crypto transactions outside traditional exchanges, the OTC model compensates for the structural shortcomings of the traditional banking system, providing a secure and compliant new path for institutional-level settlements. In 2024, global OTC crypto trading volume grew by 106% year-on-year, with stablecoin activity surging by 147%, enabling African platforms like Quidax and Busha to achieve efficient, large-scale transactions through this model. These services help enterprises meet liquidity needs with minimal market impact, achieve real-time fiat settlements, and complete simplified compliance access in high-growth markets like Nigeria, South Africa, and Ethiopia.

The overall cryptocurrency landscape in Africa is undergoing rapid transformation: with a median age of just 19.2 years and over 60% of the population unbanked, it creates a unique "demographic + economic" dual drive for digital financial solutions. Cryptocurrencies have shifted from retail speculation to practical scenarios, particularly excelling in cross-border payments and inflation resistance. Nigeria processed approximately $59 billion in crypto value last year, ranking second globally, only behind India; South Africa and Kenya are also showing strong momentum through mobile wallet integration and relatively friendly crypto policies.

Stablecoins have become the dominant asset for settlements, accounting for 43% of all crypto transactions in Sub-Saharan Africa (SSA), favored for their price stability, real-time settlements, and transparent audits. Nigeria alone absorbed over 40% of SSA's stablecoin inflows, with Ethiopia and Zambia both experiencing annual growth rates exceeding 100%. Enterprises are using stablecoins like USDT and USDC to hedge against foreign exchange fluctuations, simplify import processes, and accelerate cross-border settlements, with stablecoin trading volumes surpassing Bitcoin in most African regions.

Despite cautious regulatory stances, many African governments are shifting from "prohibition" to "participation." Nigeria's issuance of crypto licenses in 2024 is seen as a turning point, sparking a new wave of commercial interest; countries like Ghana, South Africa, and Kenya have also launched central bank digital currencies (CBDCs) and regulatory sandboxes, providing clear pathways for compliance. Executives from companies like Busha and Xago have called for a hybrid model that balances "innovation + governance + risk control" in the report.

OTC trading has achieved product-market fit across multiple industries: banks and payment service providers are embedding stablecoin channels into capital flows; manufacturers and importers are using OTC swaps to avoid slippage and bank fees; digital enterprises are leveraging crypto channels for rapid user deposits and real-time settlements. Quidax has expanded its services to include South African Rand (ZAR) and Ethiopian Birr (ETB) channels, showcasing industry momentum; infrastructure provider Kotani Pay has integrated API-based stablecoin-fiat exchanges directly into mobile wallet ecosystems.

Regulatory attitudes are shifting from "outright prohibition" to "licensing + sandboxes." In 2024, Nigeria's SEC issued operational licenses to several virtual asset service providers; South Africa's FSCA has also issued dozens of crypto asset licenses. However, the regulatory frameworks of over 15 African countries vary, creating compliance complexities for cross-regional players. Despite the cautious approach, many governments are transitioning from "banning" to "regulating." Nigeria's licensing system in 2024 has become a watershed moment, reigniting commercial enthusiasm. The CBDC and sandbox initiatives in Ghana, South Africa, and Kenya pave the way for compliance. Industry leaders like Busha and Xago have called for a hybrid model that emphasizes "innovation + governance + risk control" in the report.

Looking ahead, programmable stablecoin channels and API-driven OTC platforms will retreat to the background, becoming the "invisible infrastructure" for enterprise ERP and fintech applications, running parallel to frameworks like the African Continental Free Trade Area (AfCFTA) to support cross-border trade in Africa. Institutional-level crypto asset reserves and CBDC pilots in multiple West and East African countries will further blur the boundaries between fiat and crypto settlements, ushering in a new era of "24/7, dollar-equivalent" liquidity in Africa.

I. Overview of the African Crypto Market

The rise of cryptocurrencies in Africa parallels the evolution of fintech and digital currencies globally, closely linked to the mobile phone revolution that swept across the continent in the early 21st century. Over the past three decades, the rapid proliferation of mobile and internet technologies has laid the groundwork for digital transformation across various industries. This shift is driven by a young, tech-savvy population, providing fertile ground for the implementation of blockchain—the underlying technology of cryptocurrencies.

In Africa, over 60% of the population remains unbanked, making blockchain rapidly popular in the financial sector, offering quick and low-barrier solutions for cross-border payments and digital asset trading.

Initially, people embraced crypto assets to hedge against inflation and evade capital controls, making them personal savings tools and corporate payment channels. Today, this process continues to deepen: OTC cryptocurrency trading is providing global enterprises with a seamless capital flow experience, bypassing the numerous obstacles posed by traditional banking systems due to foreign exchange fluctuations, settlement delays, and complex cross-border compliance. With the popularity of Bitcoin, Ethereum, Tether, and other stablecoins, African enterprises are not only viewing cryptocurrencies as tools but also as a reliable, swift, and transparent financial infrastructure capable of replacing outdated traditional systems.

1.1 Evolution of Cryptocurrencies in Africa

The decentralized and unregulated nature of cryptocurrencies is perceived as a potential threat to the status of fiat currencies, thereby undermining the functions of monetary authorities. Governments are also concerned that digital assets may be used for unregulated illegal transactions. In many African countries, the initial response from central banks and financial regulators has been cautious. Consequently, countries like Nigeria, Tunisia, Egypt, Lesotho, and Algeria have successively banned the use of cryptocurrencies in formal transactions. However, due to the decentralized nature of cryptocurrencies, no single government can completely ban them, and underground trading remains active.

As major global economies (such as the UK, US, and Canada) gradually legislate and accept cryptocurrencies and digital assets, an increasing number of multinational companies—such as Microsoft, Tesla, PayPal, and KFC—have begun to accept payments in cryptocurrencies represented by Bitcoin.

Thus, global acceptance of cryptocurrencies is gradually permeating Africa, enhancing local users' confidence that "cryptocurrencies are the future of money." As transaction volumes continue to expand, some African countries have begun to relax their bans—Nigeria, Tunisia, Senegal, Sierra Leone, Ghana, etc.—or are exploring central bank digital currencies (CBDCs) as regulated crypto alternatives, including Nigeria, Egypt, Morocco, Algeria, and Kenya. In April 2022, the Central African Republic (CAR) took a further step by passing a bill to recognize Bitcoin as a legal tender alongside the Central African CFA Franc; this bill was subsequently suspended pending approval from the Bank of Central African States (BEAC). In February 2025, CAR launched a meme coin.

1.2 Cryptocurrencies in the African Business Landscape

Today, as more governments begin to explore the immense potential of cryptocurrencies—value creation, smart trading, tax revenue—the African crypto ecosystem continues to evolve. However, like in other parts of the world, African enterprises are "daring to be the first" and taking proactive steps.

Although Sub-Saharan Africa (SSA) has only $4.8 trillion in crypto trading volume, accounting for 2.7% of global trading volume (compared to 7.5% in the Middle East and North Africa (MENA) region), local enterprises are using cryptocurrencies for daily payments, to hedge against inflation, and for more frequent, smaller (retail-level) transfers. According to Chainalysis' "2024 Global Cryptocurrency Geography Report," stablecoins now account for 43% of trading volume in Sub-Saharan Africa (SSA), with Nigeria's crypto adoption rate ranking second globally (only behind India), and Ethiopia (26th), Kenya (28th), and South Africa (30th) also making it into the top 30.

The report also indicates that SSA leads the world in decentralized finance (DeFi) adoption rates, partly due to the region's urgent need for "accessible financial services": World Bank data shows that as of 2021, only 49% of adults in the region had bank accounts. Enterprises are also using stablecoins to hedge against foreign exchange risks.

In light of this trend, central banks across Africa remain generally cautious but still leave a "policy observation window" to reserve possible compliance space for crypto assets.

The COVID-19 pandemic in 2020, the Russia-Ukraine conflict in 2021, and efforts to promote regional integration have all become key turning points in the adoption of cryptocurrencies in Africa. The African Union's High-Level Expert Group on Emerging Technologies (APET) encourages the development of alternative payment methods such as blockchain and cryptocurrencies to facilitate cross-border transactions, enhance financial inclusivity, and reduce transaction costs.

II. Cryptocurrency OTC Trading in Africa

Over-the-counter (OTC) trading is rapidly becoming an alternative channel for acquiring cryptocurrencies in Africa, as trading volumes continue to rise.

Financial markets typically exist in two forms: exchanges and over-the-counter (OTC) trading. Exchanges (such as stock exchanges or various cryptocurrency exchanges) publicly match buyers and sellers, with all transactions completed "on-exchange," allowing all traders to see the transaction prices of all assets, regardless of their participation in those trades.

In contrast, OTC trading occurs directly between the two parties, with one party typically being a "Trading Desk." A Trading Desk is a commercial entity that specializes in buying and selling a specific type of asset. In OTC trading, the parties agree on a price in advance before executing the trade; only the trading parties know the volume and price of the transaction.

For cryptocurrencies, unlike exchange-based trading, OTC refers to the private matching of buyers and sellers outside of regular exchanges, allowing for the direct buying and selling of large quantities of crypto assets without impacting market prices. However, compared to exchanges, OTC trading usually carries higher counterparty risk.

As trading volumes expand, OTC trading is rapidly becoming an important alternative for acquiring cryptocurrencies in Africa.

OTC trading desks are divided into two types: Principal Desks and Agency Desks.

Principal Desk: Buys and sells crypto assets using its own funds for clients and assumes the risk of price fluctuations during the transaction window. For example, if a client requests to purchase 500 BTC, the Principal Desk will first buy it with its own funds and then deliver it to the client at the pre-agreed price, even if the market price rises during that time, the desk bears the price difference.
Agency Desk: Acts only as a matching intermediary between buyers and sellers, without using its own funds. If the price changes unfavorably before the trade is completed, the client must adjust the quote and bear the market risk. The Agency Desk charges a matching service fee.

2.1 Global Cryptocurrency OTC Trading

Data from Finery Markets shows that due to the influx of institutional funds and macroeconomic benefits, the global cryptocurrency OTC market experienced significant expansion in 2024, primarily driven by a surge in demand for stablecoins and an increase in crypto-to-crypto trading. Bitcoin accounted for 22% of the total OTC transaction volume, with the OTC market's annual trading volume growing by 106% year-on-year and stablecoin trading volume increasing by 147%, highlighting a vibrant year for institutional-level and large-scale digital asset trading.

Key events behind this growth include:

Launch of Spot ETFs: The approval of Bitcoin (BTC) and Ethereum (ETH) spot ETFs provided institutional investors with a compliant and convenient entry point.
Regulatory Benefits: The pro-crypto stance exhibited by the Trump administration significantly boosted the scale of spot trading in Q4 2024 and brought higher regulatory certainty, further stimulating institutional participation.
High Prices and Stablecoins: In December, Bitcoin broke through $100,000 and set a new historical high; at the same time, stablecoins solidified their market dominance as the main bridge between traditional finance and digital finance.
Regional Distribution: Europe led institutional spot OTC demand with a 38.5% share, while North America, Asia, and the Middle East each accounted for 15.4%.

2.2 Advantages of OTC Trading

Over-the-counter (OTC) cryptocurrency settlements have become an important complement to exchange markets, especially suitable for enterprises that require large, rapid, and compliant digital asset settlements. The following five core advantages are worth noting for global enterprises:

Deep Liquidity

OTC desks aggregate a large number of buy and sell orders outside of exchanges, allowing enterprises to complete large transactions of crypto assets or stablecoins in one go without splitting the order book. Transactions can be executed at negotiated prices, avoiding partial fills or slippage common in public exchanges.

Compliance and Transparency

Reputable OTC platforms (such as Quidax) implement comprehensive KYC/AML procedures and manage whitelists for counterparties and wallet addresses, providing auditable transaction trails and holding local licenses (such as Nigeria's SEC and South Africa's FSCA), offering full assurance to finance and compliance teams.

Rapid Settlement

Unlike traditional banking channels that can take days for settlement, OTC cryptocurrency settlements (especially stablecoins) are typically completed within minutes, significantly reducing settlement risks and accelerating working capital turnover.

Easily Accommodate Large Transactions

OTC desks focus on single transactions in the six- or even seven-figure USD range, allowing completion in a single order, avoiding the price volatility caused by large orders impacting public markets, ensuring price stability.

Personalized Services and Negotiation Space

OTC desks offer customized quotes, flexible settlement methods (fiat or stablecoins like USDT/USDC), and support direct negotiations, enabling enterprises to design transaction structures flexibly based on their cash flow needs, hedging strategies, and treasury policies. OTC trading is conducted privately outside of exchanges, making it particularly suitable for large transactions, ensuring that transaction details remain confidential.

2.3 How OTC Trading Addresses Global Enterprises' Pain Points in Africa

OTC cryptocurrency desks, with their unique positioning, can precisely resolve the long-standing challenges faced by multinational enterprises operating in Africa. The following will map pain points to OTC solutions, supplemented with mini-scenario illustrations.

Foreign Exchange Fluctuations

Pain Point: Local currency exchange rates fluctuate rapidly, and large bank settlements can erode profits.

OTC Solution: Settle using USD-pegged stablecoins (USDT/USDC) or mainstream crypto assets, locking in exchange rates and hedging intra-day FX risks in real-time.

Scenario: A Nigerian importer signs a 30-day USDT contract with an OTC desk to pay a supplier in East Asia, successfully avoiding a mid-month spike in the NGN/USD exchange rate.

Complex Cross-Border Payments

Pain Point: Multi-step intermediary bank transfers lead to delays, costs, and operational complexities.

OTC Solution: One end converts local currency to stablecoins, transferring instantly on-chain, while the other end directly exchanges for the recipient's local currency, closing the loop in a single transaction.

Scenario: A Ghanaian NGO uses Quidax's OTC desk to disburse funds in USDT to a partner in Kenya, who exchanges it for KES within minutes.

Exchange Slippage

Pain Point: Large orders impact the market, causing slippage and hidden costs.

OTC Solution: The desk completes large transactions at pre-agreed prices using its own liquidity or bilateral matching, minimizing market impact.

Scenario: An African fintech needs to purchase 5 BTC for reserves, completing the transaction at a fixed price through OTC, avoiding a 2% slippage loss.

Compliance with Local Currency Regulations

Pain Point: Varying currency controls and AML/KYC requirements across countries complicate implementation.

OTC Solution: Licensed OTC service providers (like Quidax) offer one-stop KYC/AML access and customize settlement paths based on local fiat channels and legal frameworks.

Scenario: A European exporter completes the entire process of SEC-VASP compliance, local beneficiary bank reporting, and EUR→NGN stablecoin→partner bank account through Quidax's Nigerian OTC desk, with auditable documentation.

Optimizing Vendor/Partner Payment Processes

Pain Point: Manual currency purchases and multiple bank transfers tie up working capital and involve lengthy approval chains.

OTC Solution: Dedicated account managers can negotiate payment terms, issue settlement instructions, and automate recurring payments via API or scheduled calls.

Scenario: A pan-African agricultural group sets up weekly OTC swaps to convert USD cash positions into NGN stablecoins, directly paying multiple suppliers in Lagos without needing repeated bank approvals.

Batch Payments for Platform Users

Pain Point: In high-frequency disbursement scenarios like gig economies and gaming platforms, bank batch processing is slow and fees are high.

OTC Solution: The desk can execute bulk stablecoin disbursements or direct crypto transfers, reaching end-users in areas with weak banking infrastructure.

Scenario: A Nigerian digital platform uses OTC to instantly and cost-effectively pay prize-winning players in USDT, allowing them to withdraw to personal wallets immediately.

2.4 African OTC Company Quidax

Quidax is a licensed and compliant cryptocurrency exchange founded by an African team, enabling anyone to easily buy, sell, store, and transfer crypto assets. Its core expertise lies in over-the-counter (OTC) trading, seamlessly embedding high-volume, compliant settlements into existing platforms by providing dedicated crypto APIs for enterprises and fintech companies.

Quidax operates under dual licenses from Canada's MSB and Nigeria's Securities and Exchange Commission (SEC) as a VASP. Since its official launch in 2018, Quidax has served users in over 70 countries and has localized teams in key African markets. The platform connects directly to fiat channels, supporting various African currencies such as the Nigerian Naira (NGN), South African Rand (ZAR), and Ethiopian Birr (ETB). Quidax's OTC desk can handle transactions over $100,000 and supports instant settlements in fiat or USDT, providing a smooth enterprise payment experience.

2.5 Key African Industries Leveraging OTC Trading

Overview of OTC business use cases:

Use Case 1: Cross-Border Trade and Commerce

Pain Point: International brands and distributors face high costs and long settlement cycles when settling with local partners in multiple African markets.

Solution: Through OTC stablecoin trading, enterprises can purchase digital dollars (USDC, USDT, etc.) at favorable exchange rates and then use Quidax OTC to instantly convert to local currencies for quick and compliant settlements.

Outcome: Settlement times reduced from "days" to "hours"; foreign exchange costs significantly decreased; cash flow and supplier relationships improved simultaneously.

Use Case 2: Digital Platforms and Consumer Applications

Pain Point: Large global digital platforms targeting users across Africa need to make quick payments to local partners and service providers while tightly controlling operational costs.

Solution: The platform purchases stablecoins in bulk through Quidax's OTC desk and instantly converts them to local currencies, achieving efficient and reliable revenue sharing.

Outcome: Partner payment times significantly reduced; transaction and foreign exchange costs lowered; OTC processes embedded into automated treasury workflows.

Use Case 3: Institutions and Fund Operations

Pain Point: Financial institutions, corporate groups, and investment entities urgently need reliable, compliant, and scalable solutions to transfer or circulate large values across African countries.

Solution: Quidax OTC trading supports large single transactions, ensures execution, provides local fiat channels, and complies with regulatory requirements.

Results: Enhanced fund management capabilities; increased confidence in regulatory compliance; frictionless expansion of cross-border business.

Case Study I: Simplifying Cross-Border E-commerce Settlements in Africa

NevaCommerce is a global digital commerce service company headquartered in Europe, helping international brands connect with distributors and end customers in Nigeria, South Africa, Kenya, and other emerging markets through its partnership network.

Challenges Faced

High costs and slow transaction times when settling large amounts with partners using traditional banking channels in local currencies.
Exchange rate fluctuations and high remittance costs eroding profits.
Regulatory complexities of cross-border transactions creating operational challenges.

Solution

Partnering with Quidax OTC desk to use stablecoins for cross-border settlements.
Obtaining competitive large liquidity and exchange rates through OTC trading.
Seamlessly converting stablecoins to local fiat via Quidax OTC for quick and compliant payments to partners.

Outcomes

Settlement time reduced from a maximum of 5 days to less than 1 hour.
Savings of up to 2% on foreign exchange spreads and fees per transaction.
Faster, more reliable payment methods strengthened local partnerships.

Key Differences Brought by OTC

Customized quotes and capacity for handling large single transactions.
Private, secure, and compliant transaction execution.
Support for local currencies and adherence to regulatory requirements, ensuring compliance without concerns.

"For the first time, our finance and operations teams can complete settlements in Africa quickly and cost-effectively—OTC has completely transformed our business."

— NevaCommerce, CFO

Case Study II: Simplifying Settlements for Local Partners in Africa

Global Platform Co. is a rapidly growing international digital platform with millions of users and partners in African markets such as Nigeria, South Africa, and Ghana.

Challenges Faced

Slow processes and high costs when settling with local partners and service providers.
Market pressure to shorten payment cycles to enhance user experience and partner satisfaction.
Poor flexibility and high transaction costs of traditional payment methods.

Solution

Integrating Quidax OTC desk to use stablecoins for bulk settlements.
Obtaining deep liquidity and optimal exchange rates through OTC trading.
Instant conversion of stablecoins to local fiat for quick, compliant payments to African partners.

Outcomes

Partner settlement time reduced from 48 hours to under 4 hours.
Reduced operational costs and improved fund efficiency.
OTC trading has been embedded into daily global settlement processes.

Key Differences Brought by OTC

Providing stable and locked quotes for high-value transactions.
Seamless integration via API for automated settlements.
Ensuring compliance coverage through Quidax's licenses and local expertise.

"With Quidax OTC, our funding team has the flexibility, speed, and compliance assurance needed to serve the African market seamlessly."

— Global Platform Co. CFO

III. Payment Trends of Stablecoins in Africa

Like other regions globally, Africa's stablecoin market has matured, surpassing Bitcoin to become a more favored asset in daily transactions. Except for North America (where local stablecoin trading is only slightly above Bitcoin), stablecoin trading volumes in other regions exceed Bitcoin's by more than double.

In Africa, high inflation and currency depreciation have eroded people's wealth, leading to stablecoins being used as a hedging tool against local currency instability, providing a more reliable means for transactions and value preservation.

Foreign exchange fluctuations have driven retail and small-to-medium stablecoin transfers to account for as much as 43% of all crypto transactions last year.

Currently, the growth of stablecoins in Africa is primarily driven by small transfers below $1 million—namely, retail and non-institutional transfers. Sub-Saharan Africa (SSA) is the fastest-growing region for retail and professional-level stablecoin transfers, with annual growth rates exceeding 40%. Last year, stablecoins accounted for 43% of all cryptocurrency transaction volumes in Sub-Saharan Africa.

3.1 Continued Rise in Stablecoin Adoption in Africa

Although Nigeria and South Africa lead in stablecoin adoption, countries like Ethiopia, Zambia, Mauritius, Kenya, and Ghana are also rapidly increasing their stablecoin usage. The following chart shows the year-on-year growth of retail-level (single transactions below $10,000) stablecoin transaction volumes in Sub-Saharan Africa (comparison period: July 2022 – June 2023 vs. July 2023 – June 2024).

Ethiopia and Zambia have both seen annual growth rates of over 100% in stablecoin usage over the past year. Ethiopia has become the fastest-growing market for retail-level stablecoin transfers, with an annual growth rate of 180%. The Ethiopian Birr (ETB) depreciated by 30% in July after the government relaxed currency controls to secure $10.7 billion in loans from the IMF and World Bank. This loss in currency value is expected to further increase demand for stablecoins. In Nigeria, crypto activity is primarily driven by small retail and professional-level transactions, with about 85% of the amounts received being below $1 million. Nigeria's inflow of stablecoins in Sub-Saharan Africa exceeds $20 billion, accounting for over 40%.

At the same time, in addition to the growing prominence of stablecoins, decentralized finance (DeFi) is also experiencing a significant moment in Nigeria, echoing the macro trend of Sub-Saharan Africa leading in global DeFi adoption rates.

3.2 The Role of Stablecoins in Mitigating Cryptocurrency Price Volatility

Stablecoins play a crucial role in the entire crypto ecosystem by addressing the most challenging issue in the crypto space—price volatility. Cryptocurrencies like Bitcoin and Ethereum can experience dramatic price swings in a short period, making them difficult to use as a medium for everyday transactions or reliable stores of value.

According to data from S&P Global Ratings, stablecoins can achieve near-instant final settlement in minutes during over-the-counter (OTC) settlement processes, while traditional methods often take days; slippage is minimal (usually below 1%, compared to the significant advantages of 5–10% in foreign exchange fees); and the immutable records on the blockchain enhance the transparency and compliance of KYC/AML. As a programmable, 24/7 "dollar track," stablecoins enable African enterprises, fintech companies, and telecom-financial ecosystem partners to expand cross-border payment corridors without the need to build new banking infrastructure.

3.3 Relevant Data

Although Sub-Saharan Africa (SSA) accounts for a small share of global crypto transaction volumes, several indicators suggest a promising outlook for the region in the cryptocurrency space.

YouGov 2024 survey data:

93% of global respondents have heard of cryptocurrencies, with 51% claiming to have "some understanding" of crypto.
Sub-Saharan Africa (SSA) accounts for only 2.7% of global transaction volumes.
Nigeria received approximately $59 billion in cryptocurrency value in 2024, ranking second in the global crypto adoption index (only behind India).
The willingness of African respondents to "invest in crypto in the future" is as high as 87%, surpassing other global regions.
In terms of "understanding of crypto," Nigeria (77%), South Africa (65%), South Korea (61%), and India (60%) rank at the top.
The proportion of those who "have ever held or are currently holding crypto assets" is over half in Nigeria (73%), South Africa (68%), the Philippines (54%), Vietnam (54%), and India (52%).

Chainalysis "2024 Global Crypto Geography Report"

Sub-Saharan Africa (SSA) still has the smallest share of global transaction volumes at 2.7%.
Stablecoins now account for approximately 43% of the total transaction volume in the region.
Nigeria received approximately $59 billion in cryptocurrency value in 2024, ranking second in the global adoption index.

3.4 Interview with Buchi Okoro, Quidax CEO

Q: What key changes in consumer behavior regarding cryptocurrency applications have you observed in Africa over the past two years?

A: The most noticeable shift has been from "speculation" to "practical application." Initially, most users viewed crypto assets as investment tools; now, we see a significant increase in their usage for everyday transactions—more and more consumers are using cryptocurrencies for cross-border payments and even directly for e-commerce shopping.

Q: In your view, what structural or fundamental barriers are hindering the large-scale application of cryptocurrencies in commercial transactions in Africa? Can these barriers be changed or improved?

A: The lack of regulation is one of the biggest barriers, making many businesses in African markets hesitant to use cryptocurrencies confidently. However, this can be changed. We have seen some positive signals: countries like Nigeria have introduced regulatory frameworks such as digital asset exchange licenses, greatly boosting market confidence and providing consumers with a sense of security. If this model can be replicated in more African countries, it can create an environment where businesses can embrace crypto "frictionlessly." What we need is "balanced regulation"—where regulators and compliant crypto businesses work together to encourage innovation while maintaining appropriate oversight and protecting users.

Q: Looking ahead to the next 2–3 years, how do you see the evolution of the cryptocurrency market in Africa? What changes might occur in the short and long term?

A: In the short term, more African countries will gradually introduce regulatory frameworks, leading to a "regulatory wave" in the industry. This will bring structural order, legalizing cryptocurrencies in various countries and providing consumer protection. In the long term, collaborations between traditional financial institutions and crypto companies will become increasingly close; some central banks will also launch central bank digital currencies (CBDCs) in response to the growing crypto ecosystem.

Q: Which key markets should be closely monitored? What are the core factors driving cryptocurrency adoption in these African markets?

A: Nigeria, Ghana, Kenya, Rwanda, Tanzania, and South Africa. A large and young consumer base, relatively developed financial infrastructure, and forward-looking technology policies will be the three main engines driving growth in these markets.

Q: How will OTC trading desks in Africa evolve? Considering cases of fraud and corporate governance issues, is "complete decentralization" realistic?

Answer: In the coming years, as regulatory frameworks mature, there will be a more significant trend of "institutionalization" in the OTC space. Desks will adopt more standardized operating procedures, focusing on more rigorous risk management and compliance practices. Technological upgrades will also emerge: more automated systems, stronger custody and escrow functions, etc.

Question: How are African businesses currently exploring OTC platforms? What interesting use cases, key players, and industries or sectors are involved? Which areas are growing the fastest and present the greatest opportunities?

Answer: The use cases are very diverse: cross-border trade settlements for import/export businesses, payment channels with international suppliers, and corporate hedging against currency fluctuations through OTC. The three major sectors—import/export, technology, and e-commerce—are actively leveraging the opportunities presented by OTC.

Question: How can regulatory agencies effectively collaborate with industry participants to promote the growth of the crypto industry? Is it possible to achieve pan-African crypto regulatory cooperation by referencing the African Continental Free Trade Area (AfCFTA) model?

Answer: Regulatory sandboxes are an excellent way to allow industry players to test in a controlled environment. Additionally, regular public-private dialogues are crucial for regulators and practitioners to understand each other and collaboratively establish rules. The interaction between the Nigerian Securities and Exchange Commission (SEC) and crypto stakeholders is a prime example. As for pan-African cooperation, it is entirely feasible: unified consumer protection policies could be promoted in the future, and mutual recognition of licensed institutions could be achieved.

Question: Looking ahead to the next 2–3 years, how do you anticipate the evolution of the cryptocurrency regulatory landscape in Africa?

Answer: I believe regulation will become more segmented, clearly distinguishing between different types of crypto activities—trading, payments, asset tokenization, fundraising—and tailoring corresponding rules for each type of activity.

3.5 Interview with Moyo Sodipo, Co-founder of Busha

Busha is a licensed cryptocurrency exchange and payment platform based in Nigeria, targeting the African market. Founded in 2018, it received one of the first temporary digital asset licenses from the Nigerian SEC in 2023, becoming one of the first compliant crypto exchanges in Nigeria.

Question: In your view, what structural or fundamental barriers are hindering the widespread application of cryptocurrencies in commercial transactions in Africa? Can these barriers be changed or improved?

Answer: Unclear regulation has always been a significant stumbling block. Until August 2024, Nigeria did not have a clear regulatory framework for cryptocurrencies, meaning many individuals and businesses that would have been interested in crypto and digital assets adopted a wait-and-see attitude towards our industry. Therefore, we had to spend a lot of effort persuading and explaining to get people to start using cryptocurrencies. Fortunately, under the leadership of the new SEC director, the Nigerian government has decided to begin regulating cryptocurrencies, which brings us a glimmer of hope.

Question: What key changes in consumer behavior regarding cryptocurrency applications have you observed in Africa over the past two years?

Answer: The most significant change I’ve seen is that people are beginning to recognize the importance of "cryptocurrency settlements." Looking back at Nigeria, crypto first gained widespread attention during the bull market in 2017; before that, MMM Ponzi schemes were prevalent, and many people confused Bitcoin with MMM. That was the first wave of the public trying to engage with cryptocurrencies. The second wave occurred when forex trading became popular—due to restrictions on obtaining foreign currency in Nigeria, people began using cryptocurrencies to fund trading accounts, a trend that continues today. Overall, crypto has evolved from merely a "speculative trading" tool to a payment method that can integrate into daily life. Nowadays, we see increasing discussions about the adoption of stablecoins in various scenarios.

Although cryptocurrencies have not yet been fully recognized in Nigeria, globally, people are continuously expanding the use cases for stablecoins, demonstrating how they can change the way cross-continental remittances are conducted. With the implementation of Nigeria's licensing system, we will see more businesses not only accepting cryptocurrencies but also stablecoins as payment methods in the coming years. Imagine a world where, when you want to buy a plane ticket, there’s an option to "pay with stablecoins" on the checkout page—such a world is full of possibilities. I believe we are experiencing a shift from the "get rich quick" narrative to the "practical payment tool" narrative.

Question: Looking ahead to the next two to three years, how do you see the evolution of the cryptocurrency settlement landscape in Africa? What short-term and long-term changes might we see?

Answer: The acceptance and adoption of cryptocurrencies will undoubtedly increase. I believe that within two to three years, we will see crypto being used in everyday consumption scenarios. Once various African countries begin to roll out stablecoin versions pegged to their local currencies, cross-border transactions will become much simpler: imagine having a "Kenyan Shilling Stablecoin (CKS)" and a "Nigerian Naira Stablecoin (CNGN)," allowing me to complete trade between Nigeria and Kenya without needing to open a bank account in Kenya. This is the future I envision—digital versions of national currencies operating on the blockchain, facilitating intra-African trade without the flow of physical dollars. In the coming years, different currency stablecoins will be widely traded, promoting intra-African trade without relying on physical dollars.

Question: Looking ahead to 2025, what is the overall outlook for cryptocurrencies and OTC trading in Africa?

Answer: The outlook is very positive, especially this year: as we observe different jurisdictions and market participants in Africa, we find that more and more people are finally willing to use stablecoins in various scenarios—whether for value storage, cross-border remittances, or direct payments to suppliers. The level of discussion around this topic far exceeds that of last year. Clearly, people have been "ignited" and are willing to genuinely explore this new technology to ensure their business operations are faster, smoother, and more efficient.

3.6 Interview with Jurgen Kuhnel, CEO of Xago

Xago Technologies (Pty) Ltd is a fintech company founded in 2016 in South Africa, headquartered in South Africa. The company leverages the speed and scalability of the XRP Ledger to provide efficient and secure digital payment and crypto asset trading services.

Question: As a frontline practitioner, what key changes have you observed in African consumers regarding cryptocurrency applications over the past two years?

Answer: It’s quite difficult to discuss the changes in the entire African consumer market regarding crypto because our business scenarios are very focused. However, we have indeed seen an "explosive" growth of stablecoins in Africa—using the term "explosion" is not an exaggeration. The usage of USDT and USDC has surged, with USDT being the most widely accepted. I often say that a few years ago, everyone was talking about Kenya's M-Pesa: when mobile money emerged, with some government support, it now controls about 55% of Kenya's GDP. USDT is like the "unannounced M-Pesa," sweeping across Africa.

What I mean is that when you talk to ordinary people in Africa, they are not concerned about whether USDT is 100% backed by dollars, whether it’s on the Tron or Ethereum network, or whether it has a premium or discount—they know exactly how to use it. I believe this viral spread will catch many people off guard.

Question: Looking ahead to the next two to three years, how do you see the evolution of the cryptocurrency market in Africa? What short-term and long-term changes might occur?

Answer: From our perspective, the trend is very clear. As regulatory frameworks gradually take shape, more "big players" will enter the market. Look at the U.S.: giants like BlackRock are pushing Bitcoin ETFs onto the stock market; at the government level, they are starting to view Bitcoin as a hedge against local currency or foreign exchange reserves. Even a tweet from Trump can influence coin prices. Over a dozen states in the U.S. have proposed legislation, and Trump recently signed an executive order. Once the U.S. takes this step, other countries will quickly follow suit.

American companies have already hoarded a significant amount of Bitcoin. Some might say "crypto is still in its infancy" or "it will explode," but it has already exploded—it is everywhere. Personally, I have yet to meet anyone who hasn’t heard of Bitcoin; maybe there are one or two who are truly "cut off from the world."

Looking at my children, aged 16 and 17, in ten years, they will be the main consumers, with no psychological barriers towards cryptocurrencies. In ten years, crypto will be as commonplace as mobile payments are today. Returning to our original intention: we got into crypto because we needed alternatives. For example, when I want to send money to the UK, I used to have to go through SWIFT; now I can buy cryptocurrency for direct cross-border transactions. For global banks and payment giants, switching to this new paradigm will take time, but ultimately, crypto will become another parallel settlement track.

Question: Which key markets in Africa are worth watching? What specific factors will drive crypto adoption in these markets?

Answer: Some ATMs in South Africa now allow direct buying, selling, or withdrawing of cryptocurrencies; some exchanges have integrated with retailers to enable crypto shopping. The South African market is already very mature.

The key markets will always be the largest in terms of population and economic scale: Nigeria and South Africa. They also have the highest adoption rates. Namibia is actively introducing licensed exchanges; in liquidity-constrained countries like Mozambique, cryptocurrencies can play a significant role. Overall, African users are more interested in stablecoins rather than Bitcoin or XRP—they simply want to exchange their local currency for stable assets like the dollar. For Americans, the dollar is depreciating; for Africans, the dollar is the "hard currency" that anchors everything.

Question: You previously mentioned over-the-counter (OTC) crypto trading. Can you elaborate on how businesses are currently utilizing OTC in practice?

Answer: OTC is typically not used by individuals but by businesses with urgent needs. For example, a company may hold a lot of Angolan currency but find it difficult to exchange it for dollars through local banks—most African countries need dollars to import goods or services, so they turn to OTC. Another example is a company headquartered in South Africa that has operations in Angola and needs to transfer funds back to South Africa; if traditional channels are not viable, they will use crypto OTC.

Of course, this does not mean that crypto is "more reliable"; it simply offers an additional option. If traditional foreign exchange channels are smooth, banks are fully backed, and the CFO's signature process is clear, companies will still prefer the old route. Only when traditional channels are blocked, especially when liquidity issues arise, will companies try crypto.

Question: Looking ahead, do you believe that cross-border payments in Africa will be widely driven by cryptocurrency platforms and OTC desks, similar to how the AfCFTA integrates trade?

Answer: Personally, I certainly see potential in this scenario, but end users may not realize that crypto is running in the background. As regulatory frameworks and reporting systems improve, for example, cross-border settlement companies in South Africa will be able to legally use crypto. There are still obstacles, so for now, crypto is just an alternative. In the future, crypto settlements will run parallel to traditional methods like SWIFT and Western Union, integrating into existing networks. When you open a banking app, you will see: should I use SWIFT or the crypto channel to complete this transaction?

The more stablecoins (USDT/USDC) are used, the smoother the implementation will be. We already have a partner working on integration: users pay with mobile wallets, and what ultimately arrives is USDC or USDT. There is an excellent company in Kenya operating this mobile payment system.

IV. Cryptocurrency Regulatory Framework in Africa

For international companies entering the emerging business landscape of Africa, the varying regulations, licensing systems, and compliance requirements across countries often create a maze; any misstep can lead to risks such as fund freezes, hefty fines, or even brand damage. Regulatory agencies in African countries are increasingly strict about KYC/AML requirements for large transactions. Collaborating with unlicensed trading counterparts or anonymous P2P platforms can easily expose companies to enforcement actions and fund reversals. The onboarding process for crypto OTC like Quidax includes:

Automated global sanctions list screening;
Continuous transaction monitoring;
Comprehensive customer due diligence.

Ultimately forming an institutional-level compliance framework, fully aligned with the highest global standards, ensuring that every dollar or stablecoin transaction has an on-chain immutable audit trail, available for internal and external review at any time.

Many African countries implement strict foreign exchange controls and fund repatriation rules, often leading to regulatory deadlocks in cross-border settlements. Quidax fully aligns with the guidelines of various central banks and securities commissions through direct fiat currency channels and stablecoin trading pairs pegged to local currencies—Nigerian Naira (NGN), South African Rand (ZAR), and Ethiopian Birr (ETB). This pan-African licensing model ensures that corporate fund settlements are not interrupted due to unexpected freezes or seizures.

4.1 Treating Cryptocurrency as Regulated Digital Assets

The overall regulatory trend is to treat cryptocurrencies as "virtual or digital assets" (similar to real estate) and tax them accordingly. This is the case in the United States, the United Kingdom, and Canada: the IRS has announced that the general tax principles applicable to real estate also apply to crypto assets. South Africa and Nigeria have also proposed similar frameworks under the "Virtual Asset Service Provider (VASP)" regulations.

However, faced with a highly volatile and decentralized system, most governments are still seeking a balance between "risk control" and "innovation promotion." Data shows that only a quarter of countries in Sub-Saharan Africa have formally regulated cryptocurrencies.

Despite the slow pace, the hardline stance of various African countries towards cryptocurrencies is changing. Currently, about 70% of African countries maintain a "neutral" or "uncertain" policy stance towards cryptocurrencies.

Nigeria

As one of the countries with the highest cryptocurrency holdings in Africa, Nigeria's regulatory environment has long been unclear. In 2017 and 2021, the Central Bank of Nigeria (CBN) successively prohibited formal financial institutions from participating in crypto trading (giving rise to P2P trading). During the same period, the Nigerian Securities and Exchange Commission (SEC) continued to study the market and launched the "Regulatory Incubation Program" (SRIP) in 2021, followed by the release of the "Digital Asset Rules" in 2022. In 2023, the CBN issued the "Virtual Asset Service Provider (VASP) Guidelines," which continued to prohibit financial institutions from directly trading crypto assets while allowing them to provide settlement channels for crypto trading. In 2024, the SEC released the "Accelerated Regulatory Incubation Program" (ARIP) framework and granted "Approval-in-Principle" to Quidax and Busha.

South Africa

On October 19, 2022, the Financial Sector Conduct Authority (FSCA) of South Africa officially classified "crypto assets" as financial products, regulating them under Section 1(h) of the Financial Advisory and Intermediary Services Act (FAIS Act). This classification is based on a proposal from the FSCA in November 2020, which required institutions providing crypto-related services to apply for licenses and report crypto asset transactions. Since June 2023, the FSCA has issued licenses to 59 crypto service providers.

Kenya

Similar to other countries, Kenya's stance on cryptocurrencies is also evolving. In December 2024, the National Treasury of Kenya released the "National Policy on Virtual Assets and Virtual Asset Service Providers (Draft)" and the "Virtual Asset Service Providers Bill (Draft)." The draft states: "This policy aims to create a fair, competitive, and stable market for virtual assets (VAs) and virtual asset service providers (VASPs) in Kenya." The document comprehensively outlines the licensing of VA activities and VASPs, consumer protection, and cybersecurity regulatory frameworks. The government has opened the above draft regulations for public consultation, with a deadline of January 2025.

Egypt

In 2018, Egypt's highest Islamic legislative body issued a religious decree classifying commercial transactions involving Bitcoin as "haram," meaning prohibited by Islamic law. This position was reiterated in January 2021—no protection is provided for losses incurred from crypto trading.

The "Central Bank and Banking System Law" (Law No. 194 of 2020) explicitly prohibits the issuance, trading, or promotion of cryptocurrencies without prior approval from the Central Bank of Egypt (CBE). Article 206 of this law stipulates severe penalties, including fines and imprisonment, to punish any unauthorized crypto-related activities.

Central African Republic

On April 22, 2022, the Parliament of the Central African Republic passed a law establishing cryptocurrency as the country's legal tender. The law proposed the coexistence of cryptocurrency with the current legal tender of the Central African Economic and Monetary Community (CEMAC)—the Central African Financial Cooperation Franc (FCFA).

However, CAR is a member of CEMAC, and the authority to issue currency belongs to the Bank of Central African States (BEAC). The BEAC president subsequently issued a statement declaring the new crypto law passed by CAR "invalid," stating that it violates the terms of the regional group. In February 2025, CAR launched a meme coin as a form of resistance.

Other Countries

Although the Ethiopian government is gradually opening its economy to competition and digital technology, it remains cautious about crypto assets. High mining activity and rising usage rates are forcing the country to reconsider its hardline stance. Tunisia, Senegal, and Sierra Leone remain silent or neutral, having yet to enact legislation regarding the use of cryptocurrencies. In Tunisia, the finance minister has stated that there is a need to reassess the current stance of criminalizing crypto traders. The bans in North Africa are even stricter: Egypt, Algeria, and Libya have fully prohibited the use of cryptocurrencies. In 2024, Morocco and Ghana successively released draft guidelines for cryptocurrency regulation.

4.2 Regulatory Challenges and Opportunities in the African Crypto Ecosystem

Challenges

Regulatory uncertainty: Many African countries still lack regulations that allow cryptocurrencies. Although countries like Nigeria, Kenya, and South Africa are developing strategies around Virtual Asset Service Providers (VASPs), the ultimate direction remains unclear. Crypto assets are still seen as a potential threat to monetary policy institutions.
The decentralized and unregulated nature: This characteristic of cryptocurrencies makes it difficult for governments to implement effective regulation. Attempts to launch central bank digital currencies (CBDCs) in various countries have not achieved significant success, but regulated blockchains still hold potential.
Illegal fund flows: As mentioned, cryptocurrencies provide opportunities for illegal financing; this issue is particularly prominent in Africa, where fraud and terrorist financing are on the rise.
Price volatility: Cryptocurrencies, represented by Bitcoin, are prone to severe market fluctuations, which can have a devastating impact on the finances of households and businesses.

Opportunities:

Enhancing financial inclusion: If regulatory agencies approve cryptocurrencies, it will facilitate collaboration between VASPs and traditional financial institutions, enriching financial services and products.
Promoting intra-African cross-border trade: Through regulatory coordination at the continental level, cryptocurrencies are expected to support the development of intra-African trade.
Improving payment efficiency: Cryptocurrencies, represented by stablecoins, have great potential to reduce the costs of remittances and settlements in Africa.
Hedging against inflation: Stablecoins are increasingly seen as a hedge against inflation and currency depreciation, helping to preserve household assets.

4.3 Interview with Michael Kioneki, Founder of the Blockchain Association of Kenya

Question: Please introduce the background of the establishment of the Blockchain Association of Kenya, its core mission, and the role it plays in the Kenyan blockchain ecosystem.

Answer: I am the founder and chairman of the Blockchain Association of Kenya, which was established in 2015. I entered this industry in 2014, and the ecosystem was vastly different from what it is now; I have witnessed its transformation. Until recently, I served as the growth officer and business development lead at a startup called Fonbnk. Since 2014, I have collaborated with numerous crypto and fintech startups and have been one of the early thought leaders who viewed blockchain/crypto as the infrastructure for fintech and actively promoted it. Over the past nearly ten years, I have primarily focused on educating the public and building community; in 2023, we drafted the "Virtual Asset Service Providers Bill" (VASP Bill) in collaboration with the association and some stakeholders and submitted it to Parliament. My core goal has always been to promote the ethical adoption of blockchain in Kenya, the region, and across Africa, influencing many organizations beyond Kenya and foreign investors interested in this market.

Over the past decade, different key obstacles have emerged at various stages, and only by overcoming these obstacles can we elevate the ecosystem to new heights.

Question: Looking ahead to the next two years, how do you see the evolution of the African crypto market? What short-term and long-term changes might occur?

Answer: Overall, I believe the industry will move towards "formalization." Countries like Kenya and South Africa have passed or are advancing relevant bills, and the Nigerian government is also taxing giants like Binance and requiring compliance. Kenya is similarly pursuing tax collection. Therefore, the core trend is "formalization": companies will apply for licenses, open bank accounts, and formally pay taxes, making customer acquisition more transparent, and the industry will no longer be "gray." Crypto companies need to obtain a "business license" from the government, just like fintech companies.

The biggest suspense will be which services will be allowed. For example, once Binance obtains licenses in various countries, users will be able to speculate on exchanges legally; blockchain-driven fintech will use this technology to improve cross-border payments (Yellowcard, Binance Pay are already doing this). Online payment scenarios will also emerge—users will be able to pay merchants in local currency through crypto channels, with stablecoins being the key driver. Additionally, there will be "tokenization" at the capital market level—companies may finance through security tokenization.

All of this hinges on "formalization": regulators must be able to manage the systemic risks of technology and enterprises as well as consumer risks.

Question: How are African businesses currently participating in over-the-counter (OTC) crypto settlements?

Answer: In fact, it has already begun. Companies like Quidax and Yellowcard are doing this—they connect with different banking partners in various markets to complete cross-border settlements, but they do not publicize it. There are also pure B2B companies that do not target consumers but provide settlement support for fintech or crypto companies in the background. Nigerian companies are particularly skilled in this area. BitPesa (now AZA) is also a typical example.

Question: How will OTC trading evolve? Considering fraud and corporate governance issues, is complete decentralization realistic?

Answer: What I foresee is "more formal OTC." In the future, OTC settlements will increasingly take the form of collaborations with fintech or banks, and ultimately, funds will still return to the banking system because banks want to keep the flow of funds within their systems. Both banks and regulators are curbing "decentralization"—decentralization undermines their power and brings systemic risks, so they will not allow it to happen. This is not only a phenomenon in Kenya or Africa; it is the case globally (in Hong Kong, Singapore, the U.S.); stablecoin settlements will ultimately become regulated "tools within the financial system."

High-growth areas are those with high capital flow: any trade or cross-border remittance corridor between two countries—such as Kenya-China, Dubai-Kenya, U.S.-Kenya—are potential hotspots for crypto settlements. Fintech companies just need to activate these scenarios. Platforms like Stripe can also easily layer stablecoin payments because they already understand the flow of business.

Additionally, I am optimistic about micropayments (in the range of $5 to $10). Existing systems find it difficult to send $1 online, but stablecoins can easily solve this. For example, creators can open merchant accounts and receive payments starting from as low as $5. I believe this is a high-growth niche market exclusive to stablecoins, which existing payment systems struggle to cover.

4.4 Interview with Engr Salisu Kaka, Director of the Digital Economy Department at the National Information Technology Development Agency (NITDA) of Nigeria

Question: What is NITDA's current stance on cryptocurrency and blockchain technology in Nigeria? How will it evolve in the next 2-3 years?

Answer: As a key institution in Nigeria's digital economy development, NITDA's stance must be understood within the broader framework of e-government and the digital economy. As an IT industry regulator, we released the "National Blockchain Policy" in 2023, which has been approved by the government; the core of this document is to provide a roadmap for integrating blockchain technology into Nigeria's digital economy. Therefore, we view the issue from a holistic perspective—not only focusing on cryptocurrencies but also on the underlying blockchain technology and its use cases (including cryptocurrencies) to support the adoption and development of the digital economy.

Promoting blockchain technology is our primary focus, and cryptocurrencies naturally become one of the beneficiary areas. Understanding this technology will help the country navigate the evolving landscape of blockchain and cryptocurrencies.

Question: What is the overall regulatory landscape for cryptocurrency settlements in Africa currently?

Answer: Across Africa, the momentum for regulatory development is encouraging. Several countries are working to establish necessary regulations to ensure that stablecoins and the entire cryptocurrency ecosystem are explored, creating a favorable environment for participation.

Nigeria: The Central Bank of Nigeria (CBN) initially imposed a complete ban, but as demand for cryptocurrencies grew, the CBN was forced to pivot, releasing the "Virtual Asset Service Provider (VASP) Guidelines" in 2023. This guideline was introduced under the impetus of the SEC's development of regulations for digital asset service providers, acknowledging that digital assets (including tokenized forms) can be traded, thus prompting recognition from the CBN.
In 2024, the SEC will register practitioners and issue operational guidelines based on the "Investment and Securities Act of Nigeria 2024" (ISA 2024); currently, three types of digital assets have been approved for trading. The stablecoin pegged to the Naira, CNGN, has also been launched, fully backed by Naira reserves.
South Africa: In 2022, the Financial Sector Conduct Authority (FSCA) classified crypto assets as tradable financial products, mandating "Crypto Asset Service Providers" (CASPs, equivalent to Nigeria's VASPs) to apply for licenses under the Financial Advisory and Intermediary Services Act (FAIS); licenses began to be issued in 2023, and South Africa also launched the stablecoin ZARP pegged to the Rand. In 2025, the Financial Intelligence Centre (FIC) of South Africa will require CASPs to implement the "Travel Rule" for crypto asset transfers.
Ghana: In 2022, the Securities and Exchange Commission required all digital assets to be registered, and crypto exchanges must be licensed, similar to South Africa's CASP and Nigeria's VASP.
Kenya: The National Treasury has initiated public consultations on a bill to regulate cryptocurrency and virtual asset companies.

These initiatives indicate that governments are actively formulating new laws and regulatory frameworks to ensure effective regulation of the crypto space (especially stablecoins) and provide trading opportunities for all parties. This will have a significant impact on the entire African economy: legitimacy will increase, and investor confidence will grow as they see government involvement.

Question: Is it possible to achieve pan-African cooperation in cryptocurrency regulation in Africa, similar to the African Continental Free Trade Area Agreement (AfCFTA) model? How should regulatory agencies effectively collaborate with the industry to promote the development of the crypto industry?

Answer: The AfCFTA passed the "Digital Trade Protocol" at the end of last year, which includes eight annexes covering digital trade or the digital economy—inevitably involving the use of cryptocurrencies or digital assets for transactions, one of which is cross-border payments.

Member states are returning to the negotiating table to discuss how to establish a unified cross-border payment framework in Africa, unrestricted by the jurisdictions of member states. We need an integrated framework to facilitate cross-border payments, which is one of the proposed annexes of the Digital Trade Protocol. Therefore, it is entirely possible for Africa to present "one voice" on cross-border payment issues, as well as on cross-border data flows.

For example, Nigeria's data protection regulations emphasize data localization, requiring that even when using cloud hosting, the hosting party must ensure that data is stored domestically; Kenya, on the other hand, is relatively lenient and does not strictly require localization. To engage in bilateral cross-border data flow cooperation, such differences must be coordinated. This highlights the need for unification on issues like data localization among countries.

Question: Looking ahead to the next two to three years, how do you see the evolution of the regulatory landscape for cryptocurrency settlements in Africa?

Answer: I believe that the regulatory environment in Africa and globally will continue to change dynamically. Currently, countries are working to refine relevant frameworks, and their full impact will gradually become apparent in the coming years. As these frameworks mature and trends are continuously monitored, regulation will become clearer. Once regulation is clarified, it will lead to increased investment inflows, enhanced confidence in the crypto space, and strengthened financial capabilities, ultimately translating into improved living standards—people will be able to conduct cross-border trade more smoothly. With the flexibility and decentralized nature of cryptocurrencies, along with the stability provided by stablecoins backed by national currencies, overall competitiveness will continue to rise, and influence will expand accordingly. As long as we closely monitor various risks and take necessary risk mitigation measures, the development of cryptocurrency settlements in Africa will have "the sky as the limit."

4.5 Interview with Abdul-Rasheed Dan Abu, Head of the Fintech and Innovation Department at the Securities and Exchange Commission (SEC) of Nigeria

Question: What is the SEC's stance on cryptocurrency settlements and over-the-counter (OTC) trading? How will it evolve in the future?

Answer: The Securities and Exchange Commission (SEC) of Nigeria is actively engaging with the rapidly evolving crypto ecosystem, particularly with settlement platforms and OTC trading desks. Our current stance centers on investor protection, market integrity, and the stability of the financial system. Therefore, we are incorporating these activities into Nigeria's existing securities regulatory framework and explicitly requiring compliance with anti-money laundering (AML) and know your customer (KYC) regulations.

To better understand this emerging market, the Commission is adopting a "regulatory incubation" model, interacting with crypto and digital asset participants in a controlled environment, engaging in iterative learning while identifying regulatory risks and gaps. We anticipate that the regulatory path will be "gradual but firm." As the market matures and participants increase, we will introduce specific guidelines for crypto settlement providers and OTC trading desks, covering licensing, operations, and regulation. At the same time, we will strengthen enforcement mechanisms to ensure compliance and enhance market trust.

Question: How do stablecoins impact the overall cryptocurrency ecosystem? What specific effects do they have on the regulatory and financial systems in Nigeria and across Africa?

Answer: Stablecoins play an increasingly critical role in the global crypto ecosystem. They provide price stability in a highly volatile market, becoming the preferred medium for settlements, cross-border payments, and everyday digital transactions. In markets like Nigeria, stablecoins offer users a convenient entry point into the digital economy.

However, their widespread use also brings complex challenges:

Potential impact on the stability of the Naira—widespread adoption may exacerbate dollarization and reduce demand for the local currency.
Regulatory risks—AML, counter-terrorism financing (CFT), and consumer protection, especially in informal and cross-border payment scenarios.

Looking at Africa, stablecoins also present a "double-edged sword": on one hand, they can enhance financial inclusion through fast, low-cost, borderless transactions; on the other hand, in markets with varying regulatory rigor, digital literacy, and technological readiness, regulatory blind spots may easily form.

The SEC will prioritize "full reserves, transparent disclosure, and compliance with existing financial regulations" as the primary principles for stablecoin regulation.

Question: In the face of the evolving digital asset landscape, what measures is the SEC taking to establish a clear and comprehensive regulatory framework for cryptocurrency settlements and OTC trading that encourages innovation while protecting investors?

Answer: The SEC is taking a gradual, forward-looking approach to establish a clear and adaptable regulatory framework that supports innovation while maintaining the integrity of the financial system. Key initiatives include:

Regulatory incubation (RI) and the Accelerated Regulatory Incubation Program (ARIP): Providing fintech companies with a controlled environment to test models in collaboration with regulators and assess risks in real-time.
Developing clear rules and operational guidelines for digital assets: Covering licensing frameworks, compliance obligations, and risk management processes. Relevant drafts are being closely coordinated with the Central Bank of Nigeria (CBN), the National Information Technology Development Agency (NITDA), the Financial Intelligence Unit (NFIU), and international organizations to ensure alignment with global best practices.
Investor protection: Upholding transparent disclosure, strict enforcement of AML/KYC, and ensuring market integrity, financial stability, and consumer confidence.

Question: How can regulatory agencies effectively collaborate with the industry to promote the development of the crypto industry? Is it possible to achieve pan-African cooperation in crypto regulation similar to the AfCFTA?

Answer: Digital innovation is rapidly changing, and regulators, fintech operators, technology developers, and other stakeholders must maintain open and ongoing dialogue to ensure that regulation is both pragmatic and forward-looking. At the SEC, we maintain interaction with the market through regulatory incubation and consultation forums, gaining insights into industry dynamics while providing clear compliance guidance for innovators.

On a broader scale, the prospects for pan-African cooperation in crypto regulation are promising. Just as the AfCFTA has done, a unified regulatory framework for digital assets could facilitate cross-border transactions, reduce fragmentation, and attract investment. However, the current significant regulatory disparities among countries—from complete bans to active sandboxes—pose a major obstacle. Bridging these gaps will require sustained effort, political will, and multi-stakeholder cooperation at regional and continental levels. Despite the challenges, the momentum for collaboration is increasing, and a unified framework reflecting Africa's common digital finance priorities is expected to emerge in the future, though much work remains to be done.

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