Me Too Stablecoin

There are now more stablecoin press releases coming out of Africa than there is infrastructure that has actually been built. Africa’s stablecoin economy moved roughly $88 billion last year. Last week we showed that most of it still moves through WhatsApp negotiations and manual OTC desks.

Yet every week there is a new stablecoin announcement from an African fintech. A partnership, product launch,  a pivot, and a founder quote about building a different kind of stablecoin platform on the continent. Everyone wants in. The question nobody is asking is what is actually being built.

I am seeing two very different kinds of Stablecoin companies.

The first is native builders; companies building crypto-powered payments since day one. Honeycoin is the clearest example. The Nairobi-based startup has been building rails for five years and according to TechCabal now processes $150 million monthly in B2B stablecoin transactions.

The second is non-native Stablecoin Fintechs layering stablecoins through partnerships. Flutterwave did not start with stablecoins but is now aggressively adding them; announcing partnerships with Kulipa for stablecoin cards, Polygon, and Turnkey. What they are building is Africa’s biggest stablecoin distribution network. 

Those are different things.

Flutterwave brings what native builders cannot easily build; over one million merchants, a banking license, and compliance infrastructure across multiple African markets. That is genuinely valuable. But it is not the same as building the rails.

Both can work. But they are not the same thing and the difference matters more than most people are saying out loud.

I have had conversations with people who run licensed fintechs across different African countries. The response when stablecoins come up is almost always the same.

Most African countries have not yet regulated crypto or stablecoins but have quietly warned the financial companies they regulate not to touch them. That warning does not appear in any press release but it is shaping which companies can move and which ones cannot.

Here is what makes it interesting. Some stablecoin companies operate successfully in markets where local payment service providers have been told to stay away from crypto. I was curious how. The answer is in the difference between offramping and onramping.

If a Ugandan local payment service provider partners with Binance for remittance where Binance enables users to offramp stablecoins into Ugandan shillings,  the local provider simply pays out UGX to beneficiaries. Binance sources the liquidity, prefunds the local provider, and their APIs execute the local payout. The local provider never touches a stablecoin. It touches shillings.

What the same local provider will not do is let Ugandans onramp or convert their shillings into stablecoins through the provider’s platform. That is where the regulatory exposure begins. 

So you end up with a split. Stablecoins can flow out of African currencies relatively freely. Getting money into stablecoins through regulated channels is still hard even though getting money out has become relatively easy. That is why Africa’s onramp problem stays unsolved while the offramp side keeps growing.

Reading the press is not enough to understand what is actually being built in Africa’s stablecoin economy. So Stablekoin is going to map it.

For the first time we are building Africa’s Stablecoin Map; every company building on-ramps, off-ramps, cards, B2B rails, local stablecoins, and infrastructure across the continent. If you are building in this space and want to be included, email us at [email protected] with a short description of what your company does and a website. We will review every submission.

The record needs to be complete. Help us make it so.

Written from inside Africa with love 🇹🇿💚

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