Stablecoins in Africa: Useful tool or regulatory time bomb for founders?

Stablecoins sit at the intersection of Africa’s biggest business pain and its biggest policy fear. On one hand, they promise faster settlement, cheaper cross border transfers, and a hedge against currency volatility. On the other, regulators worry about consumer protection, illicit finance, and monetary stability, especially if stablecoins become widely used in place of local currency.

In 2025, regulation has started to harden in key markets. Kenya’s Virtual Asset Service Providers Bill has been presented as a major step toward licensing and oversight of crypto activity, signalling a shift from grey zone adoption to formal compliance expectations.

This matters because many African founders have been using stablecoins informally for settlements, payments to global contractors, and supplier transactions. The moment licensing regimes tighten, founders who cannot produce proper audit trails, customer verification processes, and risk controls will be exposed. Even those not building crypto products can be affected if stablecoins are part of their treasury operations.

At the same time, the demand is real. Where FX markets are illiquid and cross border payments are expensive, stablecoins can feel like a workaround that keeps businesses moving. For founders in trade, freelancing, and cross border services, the attraction is operational. It is about speed and reliability, not ideology.

So how should SMEs think about it? As a tool, not a brand. The right question is: does this reduce cost and risk without introducing a bigger regulatory and counterparty risk? That means thinking through custody, exchange partners, reserve risk where relevant, consumer disclosures, and what happens if a regulator changes the rules quickly.

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Advice for African founders and entrepreneurs: if stablecoins touch your business, operate like you are regulated even before you are. Document transactions, use reputable partners, keep multiple payment rails, and build a compliance posture that can survive policy shifts. The goal is resilience, not shortcuts.