Africa’s promise of cheaper remittances via stablecoins is clashing with reality in many places. According to data from Borderless.xyz, January’s median spread for stablecoin-to-fiat conversions across Africa reached nearly 300 basis points — about 3% — far higher than Latin America’s roughly 1.3% and Asia’s tiny 0.07%. That gap matters. It hits wallets where people send money home.
Conversion Costs Vary By Market
Reports note huge differences inside the continent. South Africa showed one of the lowest conversion costs at about 1.5%, where several providers compete and markets have deeper liquidity.
At the other extreme, Botswana’s median spread climbed to almost 19.4% in January, although pricing eased later that month. Congo also saw conversion levels above 13%. The dataset covered 66 currency corridors and nearly 94,000 rate observations, so these are not isolated blips.
Competition And Liquidity Shape Rates
The numbers point to a simple takeaway: who sits between the stablecoin and the local cash matters. Where multiple payment providers operate, conversion costs generally sit between about 1.5% and 4%.
Where a single outfit dominates, spreads can top 13%. The “spread” here is the gap between what a provider will buy and sell a stablecoin for — like a bid-ask gap in traditional markets — and it is the execution cost a sender ultimately pays.
Based on reports, it appears these frictions come from local market structure and liquidity more than from the underlying blockchain tech.
Stablecoins Compared With Traditional FX
Borderless.xyz also measured how stablecoin mid-rates stack up against interbank FX mid-market rates, a metric the company calls the TradFi premium.
Across 33 currencies globally, the median difference was about five basis points, or 0.05%, meaning stablecoins and traditional mid-market rates were largely aligned in many places.
In Africa, however, the median gap widened to close to 120 basis points, or about 1.2%. That larger premium helps explain why stablecoins do not automatically translate into big savings for every corridor.
What This Means For Senders And Markets
Economists say stablecoins are cutting remittance costs in Africa, noting that legacy services often charge around $6 for every $100 sent.
The recent data adds nuance: faster settlement and lower fees are possible, but only when local on-ramps and off-ramps work well. For consumers, that means potential savings in some corridors and frustratingly high costs in others.
For regulators and market entrants, the signal is clear — boosting competition and liquidity at the local level is as important as improving cross-border rails.
Stablecoins have opened a route that can be cheaper and quicker. Yet in practice, the last mile — turning crypto into local money — still depends on local players, pricing models, and market depth.
Featured image from andBeyond, chart from TradingView
