Blockchain: Remittance and payment opportunities in Africa


Ian Putter, Head of Blockchain for Africa at Standard Bank

Blockchain technology has burst onto the African fintech scene over the past couple of years as adoption on the continent has skyrocketed. Distributed ledger technology creates new possibilities for transparent, decentralized and fraud-proof solutions that can help boost business opportunities between African countries. The continent has the highest remittance costs in the world, where on average it costs more than 10% to complete a transaction, which needs to change. The rise of decentralized technology offers solutions in the payments and remittances space that could reduce costs to near zero, which can accelerate economic growth and boost intra-African trade.

How is it possible?

Many people assume that every token is “currency” and they all face extreme volatility. The advent of “Stablecoins” was developed to combat the problem of volatility and give investors a way to store their money and send it. Stablecoins track the price of other assets and have been mostly pegged to traditional “FIAT” currencies like the US Dollar. They are essentially digital versions of their FIAT counterpart and offer an easy way for people to gain foreign currency exposure – without the limits on where/who you can send it to.

How Stablecoins Solve the Remittance Problem?

Stablecoins cut out middlemen like banks and payment companies like PayPal, they use peer-to-peer technology to send money to anyone at a fraction of the cost, with near-instant settlement. By cutting out the middleman, it dramatically reduces remittance fees and allows people to send money to loved ones whenever they want.

Additionally, Africans can get foreign currency exposure at their fingertips. For example, many African countries face high rates of inflation that devalue their local currency against the world’s reserve currency, the US dollar. To protect their wealth, they could exchange their local FIAT currency for a USD stablecoin and hold their wealth in stablecoins. This is especially useful for countries facing hyperinflation like Zimbabwe.

Are Africans embracing this technology?

The adoption rate of crypto in Africa has been staggering, with an adoption rate of 1200% between June 2020 and July 2021. During this period, more than $100 billion in cryptocurrency payments were destined to Africans, most of it going to remittances. Africa has the youngest population in the world, with 70% of sub-Saharan Africa under the age of 30, there is an appetite for new technologies among young people, which has helped people s Engage in new technologies and try new payment providers.

The case of African adoption

Small and medium-sized enterprises (SMEs) are the engine of the African economy. SMEs make up the majority of businesses on the continent and represent a large part of the workforce. Historically, SMEs have struggled to obtain adequate financing for their businesses and have been limited to the local market due to the cost of cross-border transactions and bureaucracy. SMEs can now access international markets using stablecoins and use decentralized finance (De-fi) for new funding opportunities.

While the continent has made progress through the African Continental Free Trade Agreement (AfCFTA), the main limitation has been the free movement of capital between people, businesses and economies. Stablecoins and decentralized payment solutions offer a unique solution to this problem and could be the key to a rapid escalation in the transformation of Africa’s well-being, wealth and global ranking.

The key in hand

The world we live in still uses FIAT currency extensively for daily commerce and transactions. As these payments are facilitated by a global banking network, it is still necessary for users to convert their stablecoins to FIAT for use in their local economy.

Standard Bank has seized the opportunity by providing banking services for growing centralized exchanges like Luno, VALR, and Revix. Standard Bank shows its commitment to helping these businesses by guiding them on disclosure and the requirements for having bank accounts. Additionally, Standard Bank has partnered with CV VC to help grow and show support for new start-ups in the space.


Blockchain technology promises to solve many pressing problems in the African payments and remittances space. Viable payment solutions are being built, but will require collaboration between traditional banking services, regulators and payment providers to achieve true scale. Blockchain technology can unlock new business opportunities between nation states and give ordinary Africans the opportunity to participate in a technological revolution and be part of the decentralized economy.


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