It is becoming increasingly clear that the biggest winners in Africa’s stablecoin ecosystem may not be the companies building stablecoins.
They may be the fintechs that already have distribution, licenses and customer trust.
A pattern is emerging.
A few weeks ago, Tether, the issuer of USDT, invested in LemFi, Africa’s remittance and cross border payments company that now moves over $1 billion every month, operates in 27 send from markets, 20 receive countries and serves more than one million users.
Then Ripple, one of the world’s largest blockchain companies and the issuer of RLUSD, invested in Flutterwave.
This week, Circle Ventures, the investment arm of Circle, the issuer of USDC, also invested in Flutterwave, Africa’s most valuable and licensed fintech serving over one million merchants.
At first glance these look like independent investments.
I don’t think they are.
I think they are revealing a new playbook.
Two years ago many of us imagined that native stablecoin companies would come to Africa and compete directly with fintechs and banks.
Instead, the evidence is increasingly suggesting something different.
Stablecoin companies are investing in the very fintechs many expected them to replace.
Why?
Because the hardest problem in Africa is no longer moving money.
It is distribution.
It is licenses.
It is regulatory relationships.
It is merchant acceptance.
It is customer trust.
African users don’t want to learn stablecoin addresses, blockchain networks or private keys.
They simply want money to move faster.
Cheaper.
Across borders.
The fintechs they already trust have already solved the hardest problem.
Stablecoins simply become the infrastructure behind the experience.
That is why I think our thesis is increasingly becoming reality.
The biggest opportunity for stablecoin issuers in Africa may not be replacing fintechs.
It may be empowering them.
And once you step back, the next move starts becoming predictable.
Everyone with strong distribution and regulatory licenses may no longer need to hunt stablecoin investors.
Increasingly, they’ll be hunted by them.
Look at M-Pesa.
Just last week it piloted stablecoin payments in the DRC together with Onafriq and Visa.
M-Pesa has never been known for raising venture capital the way startups do.
But strategic partnerships?
Those are becoming much easier to predict.
That’s one leg above.
Look at Moniepoint.
Known for agency banking.
Then it launched remittances.
Then it acquired a bank in Kenya.
From its distribution and scale, you can almost count one… two… and before three, don’t be surprised if a strategic stablecoin partnership or investment lands.
Then one leg above that.
Look at Paystack.
One of Africa’s strongest merchant platforms.
Owned by Stripe.
The same Stripe that acquired Bridge, one of the world’s leading native stablecoin infrastructure companies, for $1 Billion.
It wouldn’t be surprising if stablecoins quietly become an important part of Paystack’s long term strategy.
But I think the second order effect is even more interesting.
If licensed fintechs become the distribution layer for stablecoins, native stablecoin companies may stop competing for users altogether.
Instead, they’ll compete to become the infrastructure layer.
Their competitive advantage won’t be distribution or licenses.
It will be technology.
Treasury.
Liquidity.
Settlement.
Compliance.
Wallet infrastructure.
APIs.
Helping banks and fintechs leverage stablecoins without becoming crypto companies themselves.
Meanwhile, consumer facing fintechs may continue looking exactly as they do today.
Customers won’t need to know which blockchain they’re using.
Or which network their money moved through.
Stablecoins will simply sit behind the scenes, making money move faster, cheaper and globally.
If this thesis is right, Africa’s stablecoin ecosystem won’t divide into crypto companies and traditional fintechs.
It will divide into two layers.
The first owns distribution.
The second powers it.
Written from inside Africa with love 🇹🇿💚
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