MoneyGram has history of moving money since 1940. Eighty five years of wire transfers, agent networks, and SWIFT relationships built across every continent. This week they have partnered with Nala, an eight year old African fintech that has never sent a single SWIFT wire and is now betting its entire future on stablecoins.
When a company with 85 years on traditional rails chooses a stablecoin partner for Africa, something has changed. That is worth paying attention to. So why are African regulators still watching from a distance?
The Scar Tissue
The easy answer is that “African regulators don’t understand modern technologies, are slow, or protecting old institutions”. But there is something more honest underneath.
African regulators have internet. They watched FTX collapse. They saw $9 billion in customer funds disappear; that is 27% of Kenya’s entire GDP gone in days. If that happened inside an East African economy it would not just be a Crypto headline, It would shake the entire country.
We talk a lot about stablecoin values; Speed, Cost, Reliability. We talk less about the person earning $10 a day in Mwanza or Kisumu who cannot afford to lose a single dollar to a bad actor.Stablecoins attract people who want to use them well. They attract the opposite kind too.
There is an African proverb: one who has been bitten by a snake gets frightened even by a rope. That is where most African regulators are standing right now.
The Backup Problem
Last month Tanzania’s central bank governor was asked about the country’s position on crypto. His first instinct was not about speculation or capital flight. It was about backing.
Who issued this coin? Is there real value behind it?
He said in Swahili: “The danger with those who create these cryptocurrencies is that they have no economic activity to back the value of what they put into circulation. You can find someone who has no billion in their account but has created crypto worth five billion. That is why we have been advising people not to get involved”
He then gave an example. Someone created a coin in the name of Mo Dewji; Tanzania’s wealthiest person, Africa’s youngest billionaire at $2.1 billion, took it to the streets one evening and sold it. By morning the coin was gone. The people who bought it lost an estimated $1.8 million overnight.
That story lives in his head every time someone mentions stablecoins.
The Confusion That Costs Everyone
Some African regulators still treat stablecoins the same way they treat Bitcoin; something people buy low and sell high.Chris Maurice, CEO of Yellow Card, said that one of the most important things the stablecoin ecosystem has done is draw a clear line between stablecoins and other crypto.
When a regulator thinks stablecoins are a speculative asset the conversation is long and painful. When they understand that USDT is a dollar alternative, not a bet; there is more room to work together.
Tanzania’s governor’s concern about backing and Kenya’s draft regulation last week are actually the same conversation. Kenya just required Stablecoin issuers to keep real money behind every coin they issue. At least 30% locked in a Kenyan bank account that cannot be touched for anything else. The rest in cash or short-term government bonds maturing within 90 days. Minimum paid-up capital of roughly $3.85 million.
What MoneyGram Already Knows
MoneyGram did not partner with Nala because stablecoins are fashionable. They partnered because 85 years of SWIFT rails cannot solve the African last mile the way a stablecoin company can. That is the alignment builders and regulators need to find.
We sing a lot about what stablecoins can do; the speed, the access, the cost. We should also sing about accountability. About the safety of people who earn hard and cannot afford to lose what they have built. We should listen to the songs regulators are singing about the scars they carry and what they have witnessed, and find a way to build together from that place.
I do not believe any regulator who is truly shown the value of something for their people would just say no and walk away forever.
Written from inside Africa with love 🇹🇿💚