Visa and Yellow Card Partner for Enhanced Stablecoin Transactions Throughout Africa
In a groundbreaking move, the partnership between Yellow Card and Visa is set to introduce stablecoin payments in at least one African market by 2025, marking a significant step towards mainstreaming this innovative technology across emerging markets, including Africa [1].
This partnership comes at a time when stablecoin adoption in Africa is notably high and rapidly growing, with Nigeria leading the world in stablecoin usage [2]. Sub-Saharan Africa exhibits the highest global stablecoin adoption rate at 9.3%, driven by macroeconomic challenges such as currency devaluation, inflation, and the need for more efficient cross-border payments [3].
Nigeria, in particular, boasts approximately 25.9 million digital asset users, accounting for approximately 11.9% of its population, making it the second-largest digital asset market worldwide after India [2][4]. Stablecoins, especially USD-pegged tokens like USDT and USDC, play a crucial role in Nigeria, serving as a hedge against local currency depreciation, facilitating cheaper and faster remittances, and providing access to U.S. dollars [3].
The regulatory environment in Nigeria is evolving, with the Securities and Exchange Commission treating digital assets as securities, and the Central Bank of Nigeria relaxing previous restrictions on crypto firms. The government is drafting regulations to supervise exchanges and protect consumers [2][3]. Nigeria's Central Bank Digital Currency (CBDC), the eNaira, launched in 2021, has minimal adoption compared to the thriving stablecoin ecosystem. Policymakers are reconsidering their approach to better regulate and potentially integrate stablecoins rather than compete with them [3].
Other African countries, such as Ghana, Kenya, and South Africa, are also part of the broader regional trend of growing digital asset and stablecoin use. Africa leads global decentralized finance (DeFi) adoption, with about 95% retail usage, and sees increasing venture capital funding into Web3 startups, which underpins the stablecoin ecosystem's growth [5].
In South Africa, there is increasing institutional interest and emerging regulatory discussions, although it trails Nigeria in adoption scale. Both South Africa and Kenya are gradually developing clearer regulatory frameworks to manage digital assets and encourage innovation while mitigating risks [3][5].
Yellow Card, operating in 20 African countries, positions itself as a key player in Africa's evolving financial future through its stablecoin services. The partnership intends to integrate stablecoins into the broader financial ecosystem through Visa's global infrastructure [1]. Chris Maurice, CEO of Yellow Card, stated that Visa's wide reach opens up opportunities to work with financial institutions that can benefit most from the technology [1].
The partnership will explore how stablecoins can improve treasury operations and liquidity management, and aims to enable faster, more cost-effective cross-border transactions [1]. Edline Murungi, senior legal counsel at Yellow Card, stated that the regulatory progress in countries like Kenya could change the industry and make Kenya a hub for digital-asset activities [1].
As Africa embraces digital finance tools and creates regulatory frameworks to match, the potential for stablecoin technology to revolutionise the continent's financial landscape is immense. With Nigeria leading the way, Ghana, Kenya, and South Africa are poised to follow suit, ushering in a new era of financial inclusivity and efficiency across the continent.
| Country | Stablecoin Adoption Status | Regulation Highlights | |------------|-------------------------------------------------|----------------------------------------------------| | Nigeria | Highest global adoption; 25.9 million users; stablecoins vital for remittances and hedge against inflation | Digital assets classified as securities; easing of banking restrictions; evolving crypto regulations; eNaira CBDC exists but limited adoption | | Ghana | Part of Africa’s growing crypto usage; specific data sparse | Developing digital asset regulations; increasing awareness and use | | Kenya | Growing interest; high mobile money penetration supports digital finance | Working on regulatory clarity for crypto and stablecoins | | South Africa | Significant digital asset market; rising retail & institutional adoption | Progressive regulatory consultations aiming for balanced framework |
[1] TechCrunch. (2023). Yellow Card partners with Visa to bring stablecoins to Africa. https://techcrunch.com/2023/02/15/yellow-card-partners-with-visa-to-bring-stablecoins-to-africa/ [2] Chainalysis. (2023). Global Crypto Adoption Index 2023. https://reports.chainalysis.com/reports/2023-global-crypto-adoption-index/ [3] Quartz Africa. (2023). The eNaira is failing, but Nigeria's stablecoin ecosystem is thriving. https://qz.com/africa/2273152/nigerias-stablecoin-ecosystem-is-thriving-despite-the-failing-e-naira/ [4] Statista. (2023). Number of digital asset users in Nigeria as of 2023. https://www.statista.com/statistics/1331743/number-of-digital-asset-users-in-nigeria/ [5] Arcane Research. (2023). Africa's Web3 Landscape. https://arcane.co/research/africa-web3/
In this context, the partnership between Yellow Card and Visa not only intends to integrate stablecoins into Africa's financial ecosystem, but also aims to leverage technology to improve treasury operations and liquidity management across various businesses in Africa. As stablecoin adoption continues to soar in Africa, particularly in Nigeria, countries like Ghana, Kenya, and South Africa are also experiencing growing interest in digital assets and stablecoins, marking a significant shift towards leveraging technology in business finance across the continent.
