Stablecoins are faster and cheaper but not yet frictionless 

Last Friday, Omolara Dada, product marketing manager at Busha; Joe Daya, co-founder of Daya; and Ajabiowe Abolaji, chief product officer at Miden, got together on a panel to discuss what borderless means for Africans. 

Earlier that day, Nigeria’s president, Bola Tinubu, had signed an executive order creating a regulatory framework for digital assets, setting the tone for the conversation.

With stablecoins providing a truly borderless solution for Africans, Dada noted that one of the biggest shifts in the industry has been how much more valuable compliant businesses have become. Drawing on an experience with a recent business user at Busha, she noted compliance had become non-negotiable for businesses trying to move money across the continent using stablecoins. 

It’s a significant shift that has changed the conversation from whether a financial institution can move money seamlessly to whether they can do it while staying on the right side of the law. 

With stablecoins fast becoming mainstream among fintechs in need of alternative payment options, Joe shared that the development is hardly surprising, arguing that payment has always been one of the most valuable use cases for cryptocurrencies. 

“The market has matured, and there are now so many options that you don’t have to build the whole wheel yourself,” he said.

Why cross-border still breaks down

Abolaji broke the cross-border card problem into three parts: FX liquidity, regulatory requirements, and issuer risk policies. The FX liquidity problem is the most visible one. 

In 2020, Nigerian commercial banks began restricting naira cards for international spend in stages as dollar scarcity forced them to protect reserves. That ultimately led to the rise of fintechs providing virtual dollar cards for Nigerians who needed to make dollar payments. 

The issuer risk problem is less visible to consumers but just as costly. A wave of card shutdowns at fintechs like Eversend, Busha, and Payday followed the closure of Union54 in 2023. That shutdown, driven by rising expenses from chargeback penalties, showed how much risk is associated with issuing cards. 

Joe described what those three problems look like in practice for a business trying to move money the traditional way. A company sourcing dollars first has to find a private banker with inflow dollars, which usually come at a premium. The transfer has to go through SWIFT, a process that can take one to two days, on top of whatever time it takes to source the liquidity. Daya’s answer has been to build its own order book, moving roughly a billion naira a week in volume so that it can source liquidity for customers in under an hour instead of days.

Stablecoins solve part of that problem but not all of it. A transaction can still pass through several touchpoints before it settles, and moving real volume still means pulling liquidity from multiple vendors. 

Beyond speed, Dada noted that businesses and individuals increasingly hold USDT or USDC to hedge against naira depreciation. That partly explains why Nigeria’s naira-pegged stablecoin, cNGN, has seen slower uptake, as it doesn’t offer the same protection.

Fraud, fees, and what’s next

On fraud, Abolaji said Miden, which has issued over a million cards, treats risk as part of its core infrastructure rather than a layer added on afterward. The company uses real-time transaction monitoring, spending controls, velocity limits, and device behaviour checks, with tighter due diligence for higher-risk merchant categories.

On fees, Joe pointed to correspondent banking as the real cost driver in traditional cross-border transfers. Charges compound at 3% to 5% or higher on some African corridors. Daya’s stablecoin rails, by contrast, charge under 1% on most transfers by cutting out the chain of intermediary banks.

For all three speakers, the growth the industry has seen despite not having the full backing of regulators is a sign of what could be. Nigeria’s exit from the FATF Grey list and the recent executive order could significantly reduce the compliance costs associated with crypto products.