A new report, “The Rise of OTC and Stablecoins: Africa’s Quiet FX Revolution,” published by TechCabal Insights, in collaboration with Quidax Technologies FZCO, has revealed that stablecoins have emerged as the most dominant asset class for settlement, accounting for 43 percent of all Sub-Saharan crypto transactions. The stablecoins boast of unique attributes such as price stability, near instant settlement, and transparent audit trails, where Nigeria accounts for 40 percent of stablecoin inflows in SSA, with Ethiopia and Zambia posting year-on-year growth above 100 percent.
The report offers a strategic overview on how global businesses can leverage over-the-counter (OTC) crypto trading designed to simplify settlements, access liquidity, and expand confidently into the African market, suited to policy makers, finance leads, and treasuries delving to navigate into Africa’s ever-evolving crypto landscape with clarity and compliance.
OTC crypto volumes foster efficient, large-scale transactions
A striking aspect is that Over-the-counter (OTC) cryptocurrency trading is fast emerging as a pivotal force to foster global business, where it is playing a seamless part in Africa’s digital financial ecosystem. Through the enabling of high volume and direct crypto transactions outside the purview of traditional exchanges, OTC trading is playing an intrinsic role in tackling structural limitations posed by the conventional banking system while offering a secure, compliant pathway for institutional grade settlements.
Global OTC crypto volumes has surged by 106 percent year-over-year in 2024, attributed majorly by a 147 percent increase in stablecoin activity where several African platforms such as Quidax and Busha are leveraging this model to facilitate not only efficient and large scale transactions but also ensuring that businesses are able to navigate liquidity needs with minimal market disruption, real-time fiat settlements, and streamlined regulatory onboarding across high-growth markets such as Nigeria, South Africa, and Ethiopia.
The usage of cryptocurrency has grown in size beyond retail speculation into practical applications, notably in cross-border transactions and hedging against inflation, with Nigeria playing the leading role on the continent, processing approximately USD 59 billion in crypto value last year, ranked second only on the global scale, behind India. The report also notes that despite caution on the regulatory front, many African governments are making the shift from prohibition to engagement with Nigeria’s 2024 crypto licensing regime acting as a game changer in stirring renewed business interest while the introduction of the Central Bank Digital Currencies (CBDCs) and sandbox initiatives across countries like Ghana, South Africa, and Kenya ushers a move towards clearer compliance pathway, according to industry leaders feedback in the report.
Blockchain has witnessed a huge evolution in the financial sector on the continent, offering a fast and accessible solution to foster cross border payments and digital asset trading where the evolution has continued with the over-the-counter (OTC) crypto trading offerings lending a global businesses with seamless financial transaction experience-bypassing the friction of traditional banking systems afflicted by foreign exchange volatility, delayed settlements, and complex cross border compliance.
Leveraging crypto for payments: SSA leads DeFi, boost accessibility
In today’s times, the crypto landscape in Africa has chartered a continuous, ever-evolving path as Governments strive to find ways to tap into the huge potential in terms of leveraging value creation, smart transactions, and tax revenue. While Sub-Saharan Africa (SSA) accounts for only 2.7 percent of the global crypto transactions value of about $4.8 trillion, many businesses on the continent are leveraging crypto for payment, providing hedging against inflation or for frequent, small retail-sized transfers. The report has revealed that SSA leads the world in terms of decentralized finance (DeFi) adoption, partly driven by a growing need for accessible financial services in the region.
The study also shed light on the fact that the cryptocurrency OTC market was marked by significant growth, attributed to an increasing demand for stablecoins and a notable rise in crypto-to-crypto transactions, coupled with the market witnessing an astounding annual growth rate of 106 percent, underscoring a dynamic year for institutional and large-scale digital asset transactions. Several factors contributed to the performance, namely:
• The introduction of Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) offered institutional investors regulated market access. Source: Finery Markets
• The pro-crypto stance of the Trump administration significantly fuelled Q4 crypto spot trading to 2024 highs. It also underscores a level of regulatory certainty and inspires institutional involvement in cryptocurrencies.
• In December, Bitcoin exceeded the $100,000 mark, reaching new all-time highs, while Stablecoins solidified their market dominance as the primary bridge between traditional and digital finance.
• Geographically, Europe leads demand for institutional crypto spot OTC trading at 38.5 percent, followed by North America, Asia, and the Middle East, each at 15.4 percent.
Followed by South Africa, Nigeria leads Stablecoins on the continent, accounting for 40 percent of all stablecoins inflow, where many uses the latter to send money across borders due to inefficiencies and high costs normally associated with cross-border payment channels. The Decentralized Finance (DeFi) has gained momentum, echoing the broader trend of Sub-Saharan Africa as the global leader, boasting of over USD 30 billion in value received by DeFi services last year.
