Africa has never been friendly to crypto. Despite the continent’s incredible adoption rates, African governments have responded to almost every crypto discussion with bans or warnings.
However, some of the largest economies have abandoned this approach and are working to introduce licensing regimes, stablecoin oversight and compliance rules designed to integrate digital assets into the financial system.
The shift in sentiment and action from governments is in response to a change in what crypto has become in practice, where it has become less of an investment and more of a payment system that millions of people already use for money transfers, savings and cross-border trading.
Over the past two years, the government’s position has shifted, and it appears to have shifted most sharply where adoption is deepest. After years of treating any form of digital assets as a threat to monetary stability, ordering banks to close accounts linked to them, and warning citizens to stay away from the sector, Nigeria, South Africa and Kenya have each brought digital assets into national law, setting up licensing regimes designed to oversee the market rather than shut it down.
Across much of the continent, crypto has organically transformed into a functioning payments infrastructure, the rails that households and small businesses rely on to receive money from relatives abroad, protect savings from inflation and manage cross-border trade.
Governments found that banning the activity did nothing to reduce demand; it just pushed that demand into peer-to-peer channels they couldn’t see, which is a worse outcome for any regulator trying to keep an eye on a financial system.
The bans fell apart because the demand was structural
The scale of crypto use in Africa’s largest economies forced governments to reconsider.
Between July 2024 and June 2025, Sub-Saharan Africa received more than $205 billion in on-chain value, a 52% increase from the previous year, making it the third-fastest growing crypto region in the world, according to Chainalysis. Nigeria alone accounted for $92.1 billion of that total, almost three times as much as South Africa, and it is now one of the largest crypto markets in the world.
What says a lot about the composition of those streams is how small most of them are. Transfers under $10,000 accounted for more than 8% of the regional value, compared to 6% globally, a sign that people are using these assets for bills, payroll and family support rather than for trading.
Most of that activity is in dollar-pegged stablecoins, which now account for about 43% of the region’s crypto transaction volume. When the naira lost much of its value in early 2025, monthly on-chain volume across the region soared to $25 billion as households and businesses turned to dollar-pegged tokens to hold their assets. A stablecoin gives people access to dollars without a US bank account, on a settlement layer that is always active.
We have also seen this shift in remittances, as sub-Saharan Africa remains the most expensive region in the world to send money to, with the average cost of a transfer almost 8.8% of the amount sent, almost three times the United Nations target of 3%. Of the thirteen corridors worldwide where costs exceeded 20% in 2025, nine originate from the region.
For such fees, a stablecoin transfer settled in minutes for a fraction of a percent changes everything for the family receiving it, turning the portion that would have gone to intermediaries into money they can actually use.
Faced with such strong demand, governments shifted from prohibition to surveillance. Nigeria’s Investments and Securities Act of 2025, signed into law in March that year, classified digital assets as securities and granted the Securities and Exchange Commission the power to license stock exchanges, which it has since begun to exercise. The same committee has publicly welcomed stablecoin companies provided they meet local compliance standards.
South Africa’s Financial Sector Conduct Authority has taken an even more granular approach, approving 310 crypto service provider licenses from 533 applications by the end of March 2026.
Kenya’s Virtual Asset Service Providers Act came into effect in November 2025, splitting supervision between the central bank and the capital markets regulator.
Regulated dollarization is the trade-off that governments in Africa have accepted
Bringing this market into the formal system has consequences that policymakers across the continent have still not resolved.
The assets people use most are pegged to the US dollar. So the more a regulator legitimizes the use of stablecoins, the more it encourages households and businesses to hold and transact in foreign currencies.
Financial inclusion is improving because people who previously did not have access to dollars now suddenly have them, but the central bank’s control over its monetary base is weakening. As savings and payments shift to dollar-pegged tokens, demand for the local currency decreases and the revenue a government earns from spending its own money with it erodes.
There is no solution to this problem yet, and the legislation and regulations now emerging are essentially early attempts to get the problem under control. Licensing brings real benefits that governments want, including tax visibility, anti-money laundering enforcement, consumer protection and a banking sector willing to work with registered providers rather than treating them as a liability.
Nigeria has already taken steps to increase capital requirements for licensed firms, signaling its intention to oversee the sector in the same way it oversees other financial firms.
The biggest problem is maintaining the cost and speed advantages that have made stablecoins attractive, while layering on the compliance that requires formal oversight, as onboarding requirements and reporting obligations create friction that the informal market never had.
What makes the situation in Africa meaningful is that the rest of the developing countries are facing the same pressures. Expensive remittances, low banking penetration, persistent inflation and steady demand for dollars characterize much of Latin America and South and Southeast Asia, just as they do in Lagos and Accra.
In fact, the frameworks being tested in Nigeria, South Africa and Kenya are the first real evidence that a regulated stablecoin economy can co-exist with a traditional monetary system.
Mobile money set the stage for what is happening now because Africa’s M-Pesa and the systems that followed had trained a large population to move value via a phone well before stablecoins arrived, lowering the barrier when digital dollar rails became available.
Competition is the other force at work here, and it extends far beyond the continent. Stablecoins are increasingly rebelling against the correspondent banking networks and wire systems that have transported money internationally for generations, and incumbents are responding.
Western Union, which has seen app usage decline sharply as stablecoin remittances spread, is now building its own dollar token to distribute to more than 100 million customers, with early corridors planned in Africa and Latin America. A new federal stablecoin law in the United States has given it the legal cover it lacked a year earlier.
All of this is leading to a change in the way crypto adoption is measured. For years, the main measure was trading volume, which reflected the amount of speculation on an asset.
In Africa, it’s payment volume that counts, and the activity behind that is people moving money they can’t afford to lose.
African governments spent a decade trying to ban a technology and ultimately policed it because what they banned had already become the system by which much of their economies move money.
If these experiments hold up, they will show that the future of crypto will not be money itself, but the infrastructure that transports money.