Banks, businesses and financial technology companies are discovering that stablecoins may solve some of Africa’s oldest payment problems. But before declaring a financial revolution, we should understand what digital money actually is, where it comes from and who will benefit.
Opinion & Analysis | Clinton Consultancy
A flight from Lagos to Accra can take little more than an hour.
Yet an international payment between businesses in those two cities can, depending on the banks and payment route involved, take considerably longer.
The distance is short. The economies are deeply connected. Traders, professionals and families have moved between Nigeria and Ghana for generations.
But money does not necessarily follow the most direct route.
A business trying to pay an overseas supplier may find that its payment depends on correspondent banking arrangements, foreign-exchange availability, compliance checks and institutions located well beyond either country.
For a small importer, this can mean waiting to release goods that customers have already ordered.
For a company, it can mean uncertainty over a supplier’s payment deadline.
For someone sending money to a relative, it can mean charges that feel disproportionate to the amount being sent.
These are not abstract inconveniences. They affect livelihoods, profit margins, trust and the ability of ordinary people to participate in commerce.
And they raise a reasonable question:
If Africa has become so good at moving information and domestic payments through mobile phones, why does moving money across borders remain so complicated?
That question is now bringing banks, technology companies and international payment networks into an industry once associated mainly with cryptocurrency speculation.
The technology attracting their attention is the stablecoin.
But to understand what is changing, we first need to understand something more basic.
Money Was Already Digital Before Stablecoins Arrived
It is easy to hear the phrase digital currency and imagine an entirely new form of money.
But most people already use digital money every day.
When a salary is paid into a bank account, physical notes do not travel from an employer to an employee. The banks update financial records.
When a person sends money through a mobile banking application, the payment generally involves instructions and changes to balances held within financial institutions.
When a business pays an invoice electronically, money moves through payment and settlement arrangements that already rely heavily on computers.
In other words, digital money is not new.
What stablecoins attempt to change is how certain forms of digital value can move between people and institutions.
A stablecoin is a digital token designed to maintain its value against something else, usually a currency.
The best-known examples are linked to the US dollar.
The basic idea is simple: a token is intended to be worth approximately one dollar, and that token can move between compatible digital wallets using a blockchain network.
A blockchain is a shared electronic record of transactions maintained across a network rather than solely within the private records of one bank.
For someone sending a payment, this may create another way to move value internationally.
But—and this matters enormously—a stablecoin is not automatically the same thing as a dollar in a bank account.
The person holding the token may depend on a private issuer, reserve assets, redemption rules and intermediaries willing to exchange the token for ordinary money.
The words digital and stable should not be mistaken for guarantees.
Why the Banks Are Interested
In a television interview discussing the rise of stablecoins, Lasbery Oludimu, a senior executive at Yellow Card Nigeria, made an observation that deserves more attention than the technology itself.
He described a change in how businesses think about stablecoins.
Instead of buying digital assets chiefly to speculate on cryptocurrency prices, some companies are exploring them to manage treasury funds, pay invoices and settle cross-border transactions.
He also described growing interest from commercial banks and established payment companies.
At first, that can seem surprising.
Why would banks support a technology that might allow money to travel outside some traditional banking channels?
The answer is that banks understand the weaknesses of the existing system.
Many already provide international transfers, treasury management and supplier payments. They know the services are needed. They also know that some of the infrastructure is fragmented, expensive or difficult to navigate.
Their question is not necessarily whether banks should disappear.
It is whether banks can use newer technology to provide better services.
There is a profound difference between those two ideas.
A future in which every customer must personally manage unfamiliar digital tokens is very different from one in which a regulated bank uses stablecoin infrastructure behind the scenes to make ordinary payments more efficient.
The second may prove far more attractive to the mainstream economy.
Mastercard and Yellow Card: An Important Signal, Not Yet Proof of a Revolution
In May 2026, Mastercard and Yellow Card announced a strategic partnership to explore stablecoin-enabled payment innovation across Eastern Europe, the Middle East and Africa.
The announced areas included international remittances, business-to-business payments, treasury management and digital loyalty applications.
The companies also identified opportunities to work with financial institutions and regulators on secure payment solutions.
This is significant.
Mastercard is part of the established global financial infrastructure. Yellow Card has developed stablecoin-related services with a particular focus on African markets.
Their collaboration illustrates how the traditional and emerging financial systems may increasingly meet.
But the announcement should be understood accurately.
A partnership to explore and pilot payment solutions is not proof that every proposed product is available, profitable or demonstrably cheaper.
The commercial value will depend on the results.
Can payments be completed reliably?
Can customers access local currency?
Will the total cost fall?
Can the service comply with financial laws?
Who is responsible when things go wrong?
Those are more important questions than whether a prominent company has announced an interest in blockchain.
The established financial industry is becoming curious because stablecoins may offer useful infrastructure.
Curiosity is not the same as success.
How a Stablecoin Payment Actually Works
Imagine a Nigerian business that owes a supplier in Ghana the equivalent of US$10,000.
There are several ways the payment might be arranged.
The business could use a conventional bank transfer.
It might use an eligible regulated cross-border payment service.
Depending on institutional participation and the transaction, a regional local-currency system might be available.
Or the parties might consider a lawful stablecoin-based arrangement.
In the stablecoin example, the Nigerian business would need to obtain the relevant token through an appropriate provider.
The token could then be transferred electronically to a recipient wallet or through a payment service.
The recipient would have to decide what to do next.
If the Ghanaian supplier needs cedis, the token must be converted.
If the supplier wants dollars in a bank account, the token must be redeemed or sold through a provider that can deliver them.
This is where the apparent simplicity becomes more complicated.
The token might move between wallets very quickly.
But someone still has to provide the foreign exchange.
Someone has to maintain the conversion service.
Someone has to handle compliance.
Someone has to ensure that the recipient receives the agreed amount.
And someone has to accept responsibility if the arrangement fails.
The transfer is only one part of the payment.
For the business owner, the transaction is not complete merely because a blockchain shows that tokens have moved.
It is complete when the supplier has received the agreed value and the buyer’s contractual payment obligation has been satisfied.
That distinction is basic financial knowledge, but it is often missing from public discussions of stablecoins.
The Cheapest-Looking Payment Is Not Always the Cheapest Payment
The promise of stablecoins is often expressed in two words: faster and cheaper.
Faster may be comparatively easy to demonstrate when looking only at blockchain transfers.
Cheaper is a more difficult claim.
The Bank for International Settlements examined this question in a research paper published on 19 October 2026.
Its researchers compared cross-border payments through traditional banks, financial technology money-transfer companies and stablecoin-based channels.
The findings were more nuanced than much of the public enthusiasm suggests.
Stablecoins can be competitive in some payment corridors.
But buying and selling them may involve exchange fees, conversion spreads, withdrawal charges and additional intermediaries.
The recipient may still have to wait for access to funds in a conventional bank account.
Moreover, markets connecting dollar stablecoins to less widely traded currencies can have limited liquidity.
A transfer that costs very little on the blockchain may become expensive when the recipient attempts to convert the token into local currency.
This matters particularly in African markets where foreign-exchange availability and liquidity can already be difficult.
A business should therefore compare the amount it pays with the amount the supplier actually receives.
Not the promotional fee.
Not the transaction speed alone.
Not the blockchain charge.
The full price of getting usable money from one person to another.
That is the measure by which stablecoins should compete.
Three Different Kinds of Digital Money That Nigerians Should Understand
One of the most valuable moments in the Yellow Card interview came when the discussion turned to Nigeria’s own digital currency arrangements.
The conversation distinguished the eNaira, cNGN and dollar-linked stablecoins such as USDT and USDC.
These names can sound like different brands of the same product.
They are not.
Understanding the difference is essential.
The eNaira: Digital Money Issued by Nigeria’s Central Bank
The eNaira is a central bank digital currency.
It is issued by the Central Bank of Nigeria and denominated in naira.
Think of it as a digital form of money issued by the state rather than a token issued by a private company.
It is intended to function as part of Nigeria’s monetary system.
The central bank’s role is fundamental.
Its legal status, governance and monetary purpose differ from those of privately issued stablecoins.
cNGN: A Privately Issued Token Linked to the Naira
cNGN is a privately issued stablecoin designed to maintain a one-to-one value relationship with the Nigerian naira.
It is not issued by the Central Bank of Nigeria.
It is associated with a private issuer, WrappedCBDC Limited, and has participated in Nigeria’s regulatory innovation arrangements.
The distinction matters because a holder’s position depends on the particular issuer, backing arrangements, redemption terms and applicable regulatory framework.
There is another point that is easy to overlook.
A token can remain stable against the naira even while the naira changes in value against the dollar.
If one cNGN continues to represent one naira, it does not protect the holder from a fall in the naira’s international purchasing power.
The token may improve the way naira-denominated value moves without changing the economic value of the currency itself.
USDT and USDC: Privately Issued Dollar-Linked Stablecoins
USDT and USDC are privately issued stablecoins designed to track the US dollar.
They are different products with different issuers and legal arrangements.
Their appeal in countries experiencing foreign-exchange difficulties can be understood.
A business paying an international supplier may want access to dollar-linked value.
A household may want to preserve purchasing power in a currency it perceives as more stable than its local currency.
But neither USDT nor USDC is a US government-issued digital dollar.
Holders should examine their legal rights, reserve disclosures, custody arrangements and access to redemption.
The distinction is not merely technological. It is about who issues the money, what supports its value and who is responsible for it.
Why Would Anyone Want a Naira Stablecoin?
This is a fair question.
If much of the demand for stablecoins in Nigeria arises from a desire to access US dollars, why would a naira-linked stablecoin matter?
The answer depends on the problem being solved.
If a business wants protection from naira depreciation, a naira-linked token does not provide that protection.
But if the business wants to move naira-denominated value through digital systems, integrate payments or settle particular transactions more efficiently, a naira-linked token might serve a different purpose.
It could, in principle, become a technical instrument connecting parts of the local financial system.
It might support certain digital applications without requiring every transaction to be denominated in US dollars.
The difficulty is attracting users, liquidity and sufficient acceptance.
An IMF examination of Nigeria published in 2026 found that early adoption of cNGN had been limited.
That observation matters because the success of a currency instrument depends on more than its design.
People must have a reason to hold it.
Businesses must have a reason to accept it.
Providers must make it accessible.
And the surrounding institutions must earn trust.
A token without a functioning economic ecosystem is unlikely to change much.
A Dollar Token Cannot Fix a Weak Currency
Stablecoins may offer individuals and companies ways to hold or transfer dollar-linked value.
But widespread demand for dollar stablecoins can also reveal a deeper problem: people may be looking for alternatives because they do not sufficiently trust or cannot conveniently use the domestic financial system.
Nigeria provides an important example.
An IMF assessment in June 2026 identified inflation, currency depreciation and foreign-exchange restrictions among the factors that encouraged greater use of dollar-linked stablecoins.
That makes economic sense.
If a person needs to pay an international supplier in dollars, access to dollar-linked value may be useful.
If a household is worried about the value of its savings, it may also be attracted to a dollar-linked instrument.
But a country cannot solve its monetary problems simply by allowing more people to hold digital representations of another country’s currency.
If domestic confidence weakens further, widespread use of dollar-linked stablecoins could deepen currency substitution.
Economists sometimes call this digital dollarisation.
The concern is not that individuals are irrational for seeking a more useful financial instrument.
It is that individual decisions, when repeated across an economy, may make domestic monetary policy harder to manage.
The central bank may find that a growing share of financial activity takes place through instruments outside the domestic banking system.
That raises questions about financial stability, capital flows and the long-term strength of national currencies.
A good payment system should make African commerce easier without turning access to foreign money into the only credible route to financial security.
Why Regulation Matters When the Technology Fails
At one point in the television interview, the discussion turned to a less comfortable question.
What if stablecoin systems fail?
What happens when everyone has adopted a network and something goes wrong?
It was the right question.
Financial innovation is often explained through its best-case scenario.
A payment settles quickly.
Costs decline.
Businesses grow.
Consumers benefit.
But systems must also be judged by their worst days.
What happens when an issuer cannot redeem the token?
What happens when reserves prove inadequate?
What happens when an exchange becomes insolvent?
What happens when a customer’s wallet is compromised?
What happens when a token intended to hold its value loses its peg?
There have already been serious failures in the wider stablecoin sector, particularly among designs that attempted to maintain value through algorithms rather than conventional reserve and redemption arrangements.
Different stablecoins carry different risks, but no business should assume that the word stable removes the possibility of loss.
In a conventional banking system, customers may have legally established rights, regulated complaint processes and, in some circumstances, deposit protection or other safeguards.
Those protections do not necessarily apply in the same way to privately issued digital tokens.
This is why a sensible regulatory framework must address more than innovation.
It should consider reserve assets, disclosure, redemption, operational resilience, custody, governance, cybersecurity and what rights customers have if a provider fails.
A licence may improve accountability, but it does not make a product risk-free.
Regulation Should Protect People, Not Just Approve Platforms
The industry often calls for regulation that is fit for purpose.
That is a useful phrase, but it needs substance.
A meaningful framework should establish what a provider is permitted to do, how it must protect customer assets and what information users should receive before accepting risk.
It should also provide mechanisms for addressing complaints and misconduct.
Ghana has enacted the Virtual Asset Service Providers Act, 2025 (Act 1154).
The Bank of Ghana and Securities and Exchange Commission have been developing the regulatory and operational arrangements for the sector.
Nigeria has taken steps through its securities and financial regulatory institutions.
Other African jurisdictions, including Kenya and South Africa, have developed their own approaches.
However, legislation on the books does not mean that every company offering stablecoin services has received full approval.
Nor does authorisation for one activity necessarily permit all forms of cross-border payment, investment or financial intermediation.
African businesses must therefore examine the specific provider, activity and country.
Regulation should not exist merely to give the industry an official appearance.
It should give users enforceable protections and help legitimate businesses distinguish serious institutions from irresponsible operators.
Even the Weather Had Something to Say About Financial Infrastructure
There was an almost accidental lesson in the television discussion.
The interview took place on a rainy day, and the connection appeared to falter during the conversation.
The interruption was not evidence of a defect in stablecoins.
But it was a reminder of something easy to forget when discussing the future of digital finance.
Every elegant technology still depends on less glamorous infrastructure.
Electricity.
Telecommunications.
Reliable internet connectivity.
Secure devices.
Accessible customer support.
Financial institutions able to process deposits and withdrawals.
For a business in Lagos or Accra, resilience matters as much as innovation.
A payment network that works beautifully under ideal conditions but fails unpredictably may be unsuitable for a major commercial transaction.
The same is true if a recipient cannot obtain local currency when it is needed.
A reliable financial system needs fallback arrangements and clear responsibility when the preferred channel becomes unavailable.
A payment revolution must survive ordinary life—not just a technology demonstration.
Banks Are Not Necessarily Being Replaced. They May Be Rebuilding Themselves.
It is tempting to describe financial technology as a struggle in which innovative start-ups defeat traditional banks.
That story is simple, dramatic and frequently misleading.
Banks remain central to the real economy.
They hold deposits, provide credit, manage risk, support trade finance and operate within established regulatory structures.
Stablecoins do not automatically reproduce all those functions.
In fact, stablecoin-based payments often depend on banks or regulated financial institutions to provide access to conventional currency.
This is part of what makes the Mastercard–Yellow Card relationship interesting.
It points towards collaboration rather than a straightforward battle.
A bank may use new settlement infrastructure while maintaining its relationship with the customer.
A fintech company may supply technology that a bank does not wish to build itself.
A regulated payment provider may connect blockchain settlement to local payment networks.
The user may see little more than an improved application.
That may ultimately be a more successful model than expecting ordinary businesses and consumers to become experts in blockchain networks, wallet management and token redemption.
Africa Already Has Another Answer: PAPSS
There is a second important point often missing from discussions about stablecoins.
Africa is not waiting passively for digital-dollar technology to arrive.
The Pan-African Payment and Settlement System, or PAPSS, is designed to make eligible cross-border payments between participating African institutions more efficient using local currencies.
The system addresses a familiar problem: payments between African countries have sometimes relied on complex arrangements involving foreign currencies and international correspondent institutions.
PAPSS provides an alternative framework for participating institutions.
Its aim is not identical to that of dollar-linked stablecoins.
PAPSS is concerned with regional payment infrastructure and local-currency transactions.
Stablecoins involve digital tokens that may represent private claims linked to particular currencies.
Both may have useful roles.
The most interesting question is not which technology wins.
It is whether African businesses gain better payment choices.
Could regional settlement become easier?
Could domestic mobile-money systems connect more effectively with authorised international services?
Could exporters receive payments with less uncertainty?
Could legitimate international suppliers be paid without unnecessary cost?
A serious financial strategy should ask how the different systems can serve those needs.
The Risk of Solving Yesterday’s Problem While Creating Tomorrow’s
Financial history offers a recurring lesson.
Innovations can remove old intermediaries while creating new forms of dependence.
A stablecoin transfer may reduce the role of some correspondent banks.
But the user may become more dependent on a token issuer, exchange, custody provider or local liquidity intermediary.
The technology may make transaction records more visible.
Yet the legal identity of the person controlling a wallet may remain uncertain.
A token may move within seconds.
But if it is sent to the wrong address, recovering it may be extremely difficult.
A private company may offer convenient access to dollar-linked value.
But its business model, reserves and redemption arrangements deserve scrutiny.
The danger is not innovation itself.
It is allowing an appealing story about speed to distract from ordinary questions of legal responsibility.
Who holds the customer’s money?
Who earns income from the supporting assets?
Who absorbs a loss?
Who can resolve a dispute?
And who has authority to intervene when the system breaks down?
Those questions are as relevant to stablecoins as they are to banks.
What Serious African Businesses Should Ask Before Using Stablecoins
For a legitimate commercial payment, a business should begin with the transaction rather than the technology.
It should establish who the counterparty is, what is being purchased and which legal obligations must be satisfied.
Only then should it decide how payment will be made.
In practical terms, businesses should examine the regulatory status of the provider, the stablecoin’s reserve and redemption arrangements, the identity of the recipient, the total exchange and conversion cost, and the legal effect of the payment.
They should also consider whether an ordinary bank, regulated remittance company or available regional payment system offers a more suitable arrangement.
For larger transactions, the parties should agree in writing on the settlement currency, payment method, timing, fees, liability for failed transactions and remedies.
Where significant capital is involved, independent legal and commercial due diligence may be justified before funds move.
This is particularly important in commodities, mining, international supply contracts and investment transactions where the underlying commercial risks can be substantial.
A fraudulent supplier does not become legitimate because a payment is made using a stablecoin.
A false gold certificate does not become genuine because its issuer provides a wallet address.
Better payment technology should strengthen commercial trust, not replace the checks that make trust reasonable.
Africa’s Next Financial Revolution Should Be Judged by Ordinary Lives
The debate about stablecoins often moves quickly towards market size, institutional adoption and the profitability of new financial infrastructure.
Those are legitimate commercial questions.
But they should not become the only questions.
Consider the exporter who needs reliable payment before shipping goods.
The small manufacturer who cannot afford another unexpected foreign-exchange charge.
The worker abroad who sends money home every month.
The student whose tuition payment needs to arrive before a deadline.
The business owner deciding whether to trust a new supplier in another country.
These people do not necessarily need a revolution in financial terminology.
They need money to reach the right person, in the right amount, at the right time.
They need to know that someone will answer when the payment fails.
They need a system whose costs are understandable and whose rules are enforceable.
Stablecoins may help deliver that future.
Banks may also improve their services.
Regional systems such as PAPSS may make intra-African trade easier.
Mobile-money providers may connect more effectively to international payment channels.
The best outcome may involve all of these developments.
But success should not be measured by the number of digital tokens in circulation or the number of institutions announcing blockchain partnerships.
It should be measured by whether ordinary Africans and African businesses gain more affordable, reliable and trustworthy financial services.
The truly transformative moment will come when moving money between Lagos and Accra feels as ordinary as doing business between those cities already is.
Africa does not need a financial revolution that merely moves money faster. It needs one that makes doing business—and living ordinary lives—fairer, easier and more secure.
About Clinton Consultancy
Clinton Consultancy is a Ghana-headquartered Pan-African legal, regulatory and commercial advisory firm, with a Sierra Leone presence and professional referral relationships across African jurisdictions.
Our firm advises international investors, businesses, family offices, commodity traders, financial institutions and overseas legal advisers on African commercial matters, regulatory developments, due diligence, market entry and cross-border transactions.
Led by UK-trained legal professionals, Clinton Consultancy approaches financial innovation through the practical questions that matter to legitimate commerce: regulatory compliance, counterparty verification, transaction security, contractual rights and the ability to enforce obligations when things go wrong.
Clinton Consultancy: Your Pan-African Legal and Business Gateway.
Email: amanda@clintonconsultancy.com
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