A new Stablecoin Utility Report conducted by YouGov in partnership with BVNK, Coinbase, and Artemis surveyed more than 4,650 respondents across 15 countries who either hold or plan to hold cryptocurrencies. The findings offer a clear message: stablecoins are no longer a niche crypto tool. They are emerging as a parallel financial infrastructure — particularly in inflation-prone economies.

As of February 2026, the global stablecoin market exceeds $300 billion in market capitalization. These digital tokens, typically pegged to the U.S. dollar, have become the liquidity backbone of the broader crypto ecosystem.

But the most striking signals are coming from Africa.

In Nigeria and South Africa, adoption rates among crypto users are already extremely high. Nearly 80% of surveyed respondents in both countries reported holding stablecoins. More than three-quarters intend to increase their holdings in the coming year.

Nigeria stands out even further: approximately 95% of Nigerian respondents said they would prefer to receive payments in stablecoins rather than naira.

That figure is not just a statistic. It is a signal about trust, inflation, currency stability, and financial infrastructure.

The question is no longer whether stablecoins have utility.

The question is whether they are quietly reshaping monetary behavior — especially in emerging markets.

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What Are Stablecoins and Why Have They Scaled So Rapidly?

Stablecoins are digital tokens designed to maintain a fixed value, most commonly pegged 1:1 to the U.S. dollar.

Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins aim to provide:

• Price stability
• Instant settlement
• Borderless transferability
• Blockchain transparency

Globally, the sector is dominated by:

• Tether (USDT), valued at approximately $185 billion
  
• USDC, issued by Circle, valued around $75 billion

Together, these two tokens account for the bulk of global market capitalization.

Stablecoins function as:

• Trading pairs within crypto exchanges
• Cross-border settlement instruments
• Treasury management tools
• Dollar substitutes in volatile currency environments

They have become the liquidity rails of the digital asset ecosystem.

Africa’s Unique Stablecoin Context

Africa’s adoption curve differs from developed markets.

In the U.S. and Europe, stablecoins often serve as trading tools within the crypto ecosystem.

In Africa, they increasingly serve as:

• Inflation hedges
• Dollar proxies
• Remittance channels
• Store-of-value alternatives

Nigeria provides the clearest example.

Persistent inflation and currency depreciation have eroded naira purchasing power over time. In such an environment, dollar-linked digital assets offer perceived stability.

The YouGov survey result — 95% of Nigerian respondents preferring stablecoins over naira for payments — underscores a deeper monetary trust shift.

The Inflation Anchor Effect

In high-inflation environments, individuals seek:

• Hard currency alternatives
• Offshore banking access
• Dollar exposure

Stablecoins effectively democratize dollar access without requiring:

• Traditional bank accounts
• Cross-border intermediaries
• Foreign exchange approvals

This is particularly attractive in countries where:

• Currency controls exist
• Official exchange rates diverge from parallel market rates
• Access to dollar liquidity is constrained

Stablecoins operate 24/7, settle near instantly, and often bypass traditional correspondent banking friction.

Remittances: A Structural Use Case

South African Reserve Bank governor Lesetja Kganyago recently noted that sending $100 to neighboring Mozambique can cost as much as $30 in fees.

That is a 30% cost burden.

Remittance flows across Africa are substantial, and fees remain high due to:

• Intermediary layers
• Compliance costs
• Cross-border banking inefficiencies

Stablecoins offer a theoretical solution:

• Near-instant transfers
• Lower transaction fees
• Reduced intermediary dependency

If infrastructure and regulatory clarity improve, stablecoins could materially disrupt traditional remittance corridors.

Market Capitalization and Liquidity Backbone

With market capitalization exceeding $300 billion, stablecoins now represent the primary liquidity pool within crypto markets.

Nearly 90% of stablecoin transaction volume remains linked to crypto trading rather than real-world commerce.

Only about 6% of transactions are used to pay for goods and services.

This highlights a central tension:

Stablecoins are widely held — but not yet widely used for everyday payments.

The infrastructure gap remains significant.

Regulatory Trajectory: The GENIUS Act and Beyond

Global regulatory clarity will shape the next growth phase.

In the United States, proposed legislation such as the GENIUS Act aims to:

• Establish reserve transparency requirements
• Define issuer standards
• Protect consumers
• Integrate stablecoins within financial regulation frameworks

Regulatory clarity reduces systemic risk concerns and enhances institutional confidence.

In Africa, regulators are navigating complex questions:

• Are stablecoins currencies or securities?
• How should reserves be treated?
• How should AML/KYC compliance be enforced?
• What happens to monetary sovereignty?

Regulatory response will determine whether adoption accelerates or fragments.

Africa’s Digital Asset Centrality

Industry data from Yellow Card exchange reveals that stablecoins accounted for 43% of all digital asset transactions in Sub-Saharan Africa last year.

Nigeria alone recorded more than $22 billion in stablecoin transactions.

These figures position Africa not as a peripheral market but as a core growth driver.

Young demographics, mobile-first finance adoption, and currency volatility combine to create fertile ground.

The Infrastructure Gap

Despite high holding rates, everyday merchant usage remains limited.

Barriers include:

• Limited merchant acceptance
• Regulatory ambiguity
• Lack of consumer education
• Volatility concerns (counterparty and platform risk)
• Integration complexity for businesses

Bridging the infrastructure gap requires:

• Payment gateways
• On-off ramps
• Stable regulatory frameworks
• Institutional-grade custodians
  

Until these mature, trading will dominate use cases.

Monetary Sovereignty Concerns

Stablecoin adoption raises difficult questions for central banks.

If citizens prefer dollar-linked tokens over local currency:

• Monetary policy transmission weakens
• Capital control effectiveness declines
• Currency demand decreases
• Domestic banking deposits may shrink

Nigeria’s 95% payment preference data is particularly revealing.

It suggests not just technological adoption, but currency substitution behavior.

Central banks must balance innovation with stability preservation.

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Risks to Monitor

Several structural risks remain.

1. Regulatory Crackdowns

Sudden restrictions could disrupt access.

2. Reserve Transparency

Confidence depends on credible backing.

3. Depegging Events

Stablecoin failure would erode trust.

4. AML Concerns

Regulators may impose stricter compliance rules.

5. Liquidity Shocks

Rapid redemptions could test reserve resilience.

Long-Term Outlook: Payment Rail or Parallel Monetary Layer?

Three potential trajectories exist:

Scenario 1: Integration

Stablecoins integrate into formal financial systems, supporting remittances and treasury functions.

Scenario 2: Parallelization

They operate as parallel dollar systems outside traditional banking.

Scenario 3: Containment

Regulatory friction slows expansion.

If regulatory clarity improves and merchant adoption expands, stablecoins may evolve into mainstream cross-border settlement rails.

If currency instability persists in emerging markets, adoption may deepen further.

Why This Matters: Beyond Crypto, Toward Monetary Rewiring

At first glance, a $300+ billion stablecoin market might appear to be a niche development within digital assets.

It is not.

Stablecoins sit at the intersection of:

• Monetary sovereignty
• Cross-border finance
• Inflation hedging
• Capital mobility
• Financial inclusion
• Regulatory modernization

What is unfolding — particularly in Africa — is not simply crypto adoption. It is the gradual rewiring of how value moves, how trust is expressed, and how individuals hedge against macroeconomic instability.

To understand why this matters, we must examine five structural dimensions.

1. Monetary Sovereignty and Currency Substitution

When 95% of surveyed Nigerian crypto users say they prefer receiving payments in stablecoins rather than naira, that is not a speculative preference — it is a monetary signal.

Currency substitution occurs when residents prefer holding and transacting in foreign-denominated instruments rather than domestic currency.

Historically, this has happened through:

• Physical U.S. dollars
• Offshore bank accounts
• Dollar-denominated deposits

Stablecoins introduce a new channel:

• Instant digital dollar access
• Borderless settlement
• Low entry barriers
• 24/7 availability

This matters because domestic monetary policy relies on:

• Demand for local currency
• Banking system deposit stability
• Controlled capital flows

If stablecoins scale meaningfully in everyday commerce, they may:

• Reduce demand for domestic currency
• Complicate capital control enforcement
• Weaken central bank policy transmission

For central banks, this is not just innovation — it is a structural challenge.

2. Financial Inclusion and Dollar Access Democratization

Historically, access to hard currency has been unequal.

In many emerging markets:

• Foreign exchange access requires bank approval
• Dollar accounts are limited
• Cross-border payments are expensive

Stablecoins flatten this hierarchy.

Anyone with:

• A smartphone
• Internet connectivity
• A crypto wallet

Can access dollar-linked digital assets.

This democratization of dollar exposure has two consequences:

1. It reduces financial exclusion.
2. It erodes gatekeeping mechanisms of traditional banks.

This matters especially in Africa, where:

• Large populations remain underbanked
• Mobile penetration is high
• Informal economies dominate

Stablecoins merge mobile finance with dollar stability.

That combination is structurally powerful.

3. Remittance Cost Compression and Economic Efficiency

Remittances are lifelines across Africa.

Yet fees remain disproportionately high.

If it costs $30 to send $100 to Mozambique, the effective cost is 30%.

Stablecoins have the potential to:

• Lower settlement costs dramatically
• Reduce intermediary layers
• Shorten transaction times
• Increase transparency

If even a portion of remittance corridors transition to stablecoin rails, the impact on household disposable income could be significant.

For economies reliant on remittance inflows:

• Reduced fees increase net capital inflow
• Households retain more value
• Informal settlement channels decline

The economic efficiency gain is not theoretical — it is measurable.

4. The Banking System Competitive Pressure

Stablecoins create competitive pressure on banks in three ways:

A. Cross-Border Settlement

Traditional correspondent banking systems are slow and costly.

Stablecoins settle near instantly.

B. Treasury Operations

Businesses may increasingly hold stablecoins for international transactions.

C. Deposit Migration Risk

If stablecoins become widely used for savings and payments, local currency deposits may decline.

Banks face a strategic dilemma:

• Integrate stablecoin capabilities
• Compete with digital-native platforms
• Risk losing cross-border settlement volume

This is not about crypto replacing banks.

It is about forcing modernization.

5. The Rise of Programmable Money

Stablecoins operate on blockchain networks.

This enables:

• Programmable payments
• Smart contract integration
• Automated settlement
• Transparent transaction histories

Traditional fiat systems lack such programmability at scale.

Programmable money introduces:

• Automated payroll systems
• Conditional disbursements
• Embedded compliance rules
• Tokenized financial instruments

Stablecoins are the foundation layer for a broader programmable financial ecosystem.

That extends far beyond trading.

6. Global Dollar Demand Reinforcement

Interestingly, stablecoins may reinforce U.S. dollar dominance.

Even as geopolitical narratives focus on de-dollarization, stablecoins:

• Are predominantly U.S.-dollar pegged
• Expand global dollar usage
• Increase offshore dollar liquidity

This means that:

• Dollar demand may increase even if physical cash declines
• Emerging markets may become more digitally dollarized
• U.S. monetary influence may expand indirectly

From a geopolitical standpoint, stablecoins may strengthen — not weaken — dollar centrality.

7. Institutional Capital and Regulatory Transformation

The $300 billion market size signals institutional gravity.

As regulation clarifies — particularly through frameworks like the proposed GENIUS Act in the U.S. — stablecoins may attract:

• Institutional treasuries
• Corporate balance sheets
• Payment networks
• Traditional financial institutions

Regulatory clarity is catalytic.

It transforms stablecoins from speculative tools into regulated payment instruments.

That transition matters for:

• Consumer protection
• Systemic stability
• Institutional adoption

8. Africa as a Structural Testing Ground

Africa’s centrality in stablecoin growth is not accidental.

It reflects:

• Youthful demographics
• Mobile-first finance
• Currency volatility
• Cross-border trade friction

In many ways, Africa functions as a laboratory for digital monetary experimentation.

If stablecoins achieve meaningful everyday usage in African markets, they may:

• Influence policy globally
• Encourage other emerging markets to follow
• Accelerate regulatory harmonization
  

9. The Infrastructure Gap as Opportunity

The fact that 90% of stablecoin transactions still involve trading rather than goods and services highlights unrealized potential.

Infrastructure development could unlock:

• Merchant integration
• Point-of-sale stablecoin payments
• Salary disbursement via digital dollars
• Government service payments

If merchant acceptance grows, stablecoins may transition from financial asset to payment utility.

That transformation would reshape financial intermediation.

10. Systemic Risk and Trust Fragility

However, the systemic importance of stablecoins also introduces fragility.

If:

• A major issuer depegs
• Reserve transparency collapses
• Regulatory crackdowns escalate

Trust could erode rapidly.

Given stablecoins now function as crypto liquidity backbone, systemic failure would have cascading effects.

This is why regulatory oversight matters.

Stablecoins are too large to ignore.

The Bigger Picture: Parallel Financial Infrastructure

What makes stablecoins uniquely important is not their current transaction volume.

It is their optionality.

They offer:

• A parallel settlement layer
• A parallel store of value
• A parallel cross-border payment system

Parallel systems create competitive pressure on incumbents.

They also create resilience alternatives for users.

The mere existence of a viable parallel financial rail alters bargaining dynamics between citizens, banks, and governments.

That is transformative.

Final Reflection

Stablecoins are often discussed in crypto terms.

But the more appropriate lens is macro-financial infrastructure.

In inflation-prone economies, they represent:

• Stability access
• Dollar exposure
• Payment efficiency

In developed markets, they represent:

• Yield-bearing liquidity tools
• Treasury optimization instruments
• Settlement modernization catalysts

The $300 billion market size is not the endpoint.

It is an early phase indicator.

If regulatory clarity improves, infrastructure expands, and merchant adoption scales, stablecoins could become one of the most consequential financial innovations of the decade.

And in Africa — where adoption is already high — that shift may unfold faster than many expect.

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photo source: Google

By: Elsie Njenga 

26th February,2026