Experts say remittances are more important than aid for Africa’s economy, and stablecoins could make sending money across borders faster and cheaper. With billions of dollars in annual remittances, improvements in payment technology could benefit families and businesses.
Remittances vital for African economies
Africa receives tens of billions in remittances each year from workers abroad. These funds often support household income, education, and small business spending more directly than foreign aid. Experts say regular worker-to-family transfers have a bigger impact on daily life than one-time or project-based aid flows.
Challenges in current payment systems
Sending remittances can be slow and expensive due to high fees and long settlement times. Traditional cross-border payments rely on established banking systems, correspondent banks, and multiple intermediaries. This can mean high costs for senders and delays for recipients, particularly in regions with limited banking access.
Stablecoins could reduce costs
Stablecoins are digital assets tied to stable values such as a major currency. They can be used to move value quickly across borders. Experts and industry voices say using stablecoins could cut fees and settlement time for remittances. By reducing reliance on multiple intermediaries, transactions could clear faster and at lower cost.
Regulatory and infrastructure considerations
For stablecoins to be widely used for remittances in Africa, clear regulation and infrastructure are needed. Governments and financial authorities would need to establish rules for issuing and using stablecoins safely. Payment systems and on-ramps, such as wallets and compliant exchange services, must also be in place.
Potential benefits for users
If adopted responsibly, stablecoin-based remittances could help more money reach recipients intact. Lower fees mean more funds stay with families and small businesses. Faster settlement can make urgent transfers more timely, which is important for emergencies or regular support.
Conclusion
Experts argue that remittances are a key economic lifeline for many African households and economies, and that stablecoins could help make these payments faster and less costly. Wider use depends on regulatory clarity and suitable payment infrastructure.
Source: https://cointelegraph.com/news/remittances-more-important-than-aid-africa-stablecoins
