When President Donald Trump signed the GENIUS Act (Guaranteed Electronic Nationally Issued United States Stablecoins) into law on July 18, 2025, it marked the dawn of America’s first comprehensive federal regulation of dollar-backed stablecoins.
While the legislation was hailed in Washington as a tool to cement U.S. dollar supremacy in the digital asset space, its reach immediately extended far beyond U.S. borders, shaking the financial foundations of continents like Africa, where stablecoins have become a lifeline against currency instability and expensive remittance costs.
Stablecoins: Africa’s digital dollar lifeline
Across Africa, especially in Nigeria, Kenya, Ghana, and South Africa, millions have turned to stablecoins such as Tether’s USDT and Circle’s USDC to safeguard savings against rampant inflation, receive remittances cheaply, and bypass unreliable banking infrastructures. In economies where national currencies can depreciate rapidly, these digital tokens offer a virtual “dollar wallet” accessible straight from smartphones, often serving as the most stable form of money available.
Stablecoins have become essential to daily economic survival in Africa, used widely for cross-border trade, freelance payments, and as inflation hedges. The informal but vital use of these digital dollars is reshaping African commerce and personal finance on an unprecedented scale.
In the first half of 2024 alone, stablecoins settled an estimated $2.6 trillion in value globally. That slightly surpasses Italy’s 2024 GDP ($2.3 trillion) and almost nears Africa’s 2023 GDP ($3.1 trillion).
While there’s a general rise in the use of stablecoins across the globe, Africa is leading the way in the adoption of stablecoins, which have emerged as powerful tools in reshaping the continent’s economic landscape and unlocking new opportunities for Web3 growth.
According to a report by FSD Kenya, stablecoin volume in Africa hit more than $30 billion, which is 50% of the total crypto volume attributed to Africa between June 2022 and July 2023.
Africa’s unique economic challenges, such as dollar scarcity, inflation and currency depreciation coupled with its vibrant fintech ecosystem, relatively high smartphone and internet penetration, have driven the mass adoption of stablecoins.
This has bridged the gap in expensive dollar conversions and loss of value of local currencies, with stablecoins offering a digital alternative to traditional banking which takes days to complete cross-border transactions.
Mobile money services such as Kenya’s M-Pesa have integrated with platforms offering stablecoin-fiat exchanges such as Binance, offering financial services to individuals in underserved areas.
Stablecoins also reduce transaction costs, particularly for cross-border remittances. Traditional remittance services charge high fees, often exceeding 6% of transaction value, while stablecoins enable near-instant transfers at a fraction of the cost.
Due to these factors, the value of stablecoin transactions in Africa, on average, surpasses the combined transactions of Bitcoin, Ether and altoins. This means African users find more utility while trading stablecoins than cryptocurrencies.
For Nigerians, saving in dollars is the primary use of stablecoins, followed by trading crypto and securing better currency conversion rates.
Major startups driving stablecoin adoption in Africa are Yellowcard, Bitmama, Canza Finance and Busha.
In February, the Nigerian government introduced its first regulated Naira stablecoin, cNGN, which is already interoperable with the Binance Smart Chain and Bantu network. However, it remains in pilot stage.
On its part, South Africa has been making inroads to regulate stablecoins, so as to attract more investment into the sector while protecting users against cybercrime and giving them more options for affordable and secure digital asset payments and transactions.
There are two stablecoins in the country – ZARP and ZARC – pegged to the South African Rand (ZAR). ZARP went live in 2021 on the OVEX crypto exchange while ZARC was launched in Q1 2023 and is available on the non-custodial crypto app SentiPay.
South Africa has already classified cryptos as financial products, having approved 59 operating licenses for crypto currency businesses in March. This proactive approach sets the stage for a supportive environment for more stablecoin adoption, with startups like VALR, Luno and Altify helping South Africans diversify their investment portfolios and helping them settle retail bills using stablecoins.
South Africa’s Intergovernmental Fintech Working Group plans to publish additions to include “stablecoins” as a particular type of crypto asset. The working group published a crypto regulation paper in June 2021, which will be amended to include stablecoins into the crypto asset class in addition to finalizing a diagnostic of the domestic stablecoin landscape.
The country’s 2024 budget review highlighted the need for structural reforms and a focus on improving public financial management. While detailing its plan to promote digital payments, the National Treasury announced an upcoming policy change on crypto assets, specifically for stablecoins. There are also plans for bank stablecoins.
What the GENIUS Act changes
The GENIUS Act imposes stringent rules on stablecoin issuers, including mandatory reserve backing with U.S. Treasury bills or dollars, licensing, monthly disclosure, and robust anti-money laundering (AML) and know-your-customer (KYC) protocols. While these laws aim to provide clarity and build trust, they come with complex extraterritorial implications. Because the overwhelming majority of dollar stablecoins originate from U.S.-based companies like Circle and Tether, the legislation effectively governs Africa’s access to these tokens.
The GENIUS Act introduces the United States’ first comprehensive federal framework for regulating payment stablecoins—cryptocurrencies pegged to a stable asset like the U.S. dollar. It defines what qualifies as a “payment stablecoin” and lays out strict requirements for issuers, creating long-awaited legal clarity for a sector that’s been operating in regulatory limbo.
A cornerstone of the legislation is the requirement that all stablecoins be backed 1:1 by U.S. dollars or high-quality liquid assets, such as U.S. Treasuries. This ensures that every stablecoin in circulation can be redeemed on demand, guarding against the kind of collapses that rocked the crypto sector in 2022. Issuers must also submit to monthly reserve disclosures and independent audits, with heightened scrutiny for those managing over $50 billion in assets.
To protect consumers, the act mandates that stablecoin holders be prioritized over creditors in the event of a bankruptcy. It also enforces anti-money laundering (AML) and Know Your Customer (KYC) protocols, bringing stablecoin issuers in line with the financial industry’s core compliance standards.
The act creates a dual-tiered licensing regime. Issuers holding more than $10 billion in assets must register with federal authorities, such as the Office of the Comptroller of the Currency (OCC), while smaller players can choose state-level oversight. This approach aims to balance innovation with oversight, allowing startups to grow while subjecting systemically significant issuers to federal scrutiny.
The GENIUS Act also draws a clear line between stablecoins and investment products. It bans yield-bearing and algorithmic stablecoins—those not fully backed by assets—closing loopholes that previously allowed firms to offer risky or speculative versions of stablecoins under the guise of payments tools.
Finally, foreign stablecoin issuers are permitted to operate in the U.S. only if they register with U.S. regulators and their home country’s legal regime is deemed “comparable.” This provision extends U.S. regulatory influence globally while setting a high bar for international market access.
By codifying these protections and guardrails, the GENIUS Act transforms stablecoins from a loosely regulated innovation into a credible component of the global financial system. It’s a landmark shift that positions the U.S. as a leader in digital currency governance—offering stability, accountability, and a clear path for compliant innovation.
King-son Ariweriokuma, CEO of Aleph Biz Solutions Ltd. in Nairobi, cautions: “African users will likely encounter more stringent identity verification layers when transacting or converting stablecoins. While intended to combat illicit finance, these requirements risk excluding vulnerable populations without formal identification.” Identity verification remains a major barrier in many regions where official ID documents are scarce.
Double-edged sword for Africa
For African fintech innovators and remittance-heavy economies, the GENIUS Act introduces a long-awaited framework that could legitimize and stabilize the use of dollar-backed stablecoins across borders. With clear rules on reserves, redemption rights, and issuer transparency, users in African markets—where inflation and currency volatility often undermine trust in local money—could gain access to safer, more reliable digital dollars.
This is especially impactful for small merchants, remote workers, and diaspora families who rely on stablecoins for cross-border payments. The Act could create pathways for U.S.-regulated stablecoins to be more widely adopted by African wallets, banks, and mobile money platforms, reducing transaction costs and unlocking new forms of digital financial access.
But the same rules that build trust also raise barriers. By outlawing algorithmic and under-collateralized stablecoins—tools often developed and adopted in low-income markets for their affordability and flexibility—the Act could choke off innovation that doesn’t fit a U.S.-centric compliance mold.
Moreover, by requiring that foreign stablecoin issuers be registered with U.S. regulators and operate under “comparable” legal regimes, the Act gives American authorities outsized influence over which African issuers and products are allowed to serve their own citizens. Many African countries lack the regulatory infrastructure to meet these comparability standards, effectively locking them out of U.S. dollar–denominated stablecoin markets or forcing them to rely on U.S. intermediaries.
This risks deepening digital financial dependency, where African users are increasingly transacting with U.S.-controlled stablecoins issued by U.S.-licensed entities, under rules written in Washington. Without strong regional data protections, consumer safeguards, and interoperable policy frameworks, African financial sovereignty could erode—despite the inclusive rhetoric.
The GENIUS Act creates a global benchmark—but not a global solution. For African nations, it underscores the urgency of crafting their own homegrown digital currency policies: ones that support innovation, protect consumers, and define clear rules of engagement for foreign and domestic stablecoin issuers alike.
Without that proactive stance, Africa risks becoming a regulatory taker—shaped by rules it didn’t write, serving systems it doesn’t control.
“There’s a real concern that African nations could become passive consumers of digital dollars coded and regulated externally, with little sovereignty over their own monetary systems,” says economist Amara Mbaye (African Development Bank), emphasizing the need for a digitally sovereign path. Mbaye notes, “Unchecked dominance by foreign-issued stablecoins could undermine African monetary sovereignty, especially as nations develop their own central bank digital currencies.”
Nigeria’s eNaira and the Central African Republic’s Sango Coin are early experiments in African CBDCs that try to reclaim monetary autonomy, but they face stiff competition from widely used U.S.-backed stablecoins.
Transforming cross-border trade
Remittances remain Africa’s economic lifeblood. The World Bank notes Africa received over $53 billion in migrant remittances in 2023. Traditional channels like Western Union charge fees often above 7%. Stablecoins have slashed these fees to as low as 1%, dramatically improving livelihoods. This is a vital breakthrough for families relying on steady transfers.
However, compliance obligations under the GENIUS Act could raise barriers. Users may face increased documentation requirements or slower processes. Moreover, fintechs operating stablecoin exchanges must ensure compliance with both African regulators and U.S. laws, complicating cross-jurisdiction operations.
Security
Alexander Kostyuchenko, Head of Technology Solutions Product Line at cybersecurity firm Kaspersky, highlights a broader digital finance reality: “Modern digital finance requires a proactive and cohesive security strategy combining transparency, advanced risk management, and innovation.” Strong regulation can foster safer financial services but must avoid stifling innovation and financial inclusion.
The GENIUS Act signals a paradigm shift: it pushes away the “wild west” era of crypto into a regulated, institutionalized domain. As Reuters reported, “The crypto industry will take a step closer to going mainstream” with bills like the GENIUS Act, clarifying jurisdiction and consumer protection while expanding regulatory oversight.
African policymakers face a stark choice: passively comply with regulations shaped abroad or lead the digital currency revolution with tailored solutions. Isaac Christopher Lubogo, legal scholar and advocate for Africa’s digital sovereignty, argues that “Africa must draft, not copy” regulatory frameworks. He recommends multi-asset stablecoins backed not only by dollars but also by gold, commodities, or African economic baskets, reducing overreliance on the U.S. dollar.
Lubogo proposes Pan-African regulatory bodies under the African Continental Free Trade Area (AfCFTA) or African Union for digital currency oversight, and urges investment in blockchain legal education—training judges, lawyers, and regulators for smart contract and tokenized asset governance.
Furthermore, cultivating local fintech innovation hubs—Kenya’s Silicon Savannah, Nigeria’s Flutterwave, and South Africa’s Yoco—would empower design and deployment of regionally relevant stablecoins integrated with programmable contracts, boosting trade and financial inclusion.
Global competition
At a global level, the GENIUS Act is part of a U.S. strategic push to retain monetary dominance against rivals like China’s digital yuan and Hong Kong’s emerging stablecoin frameworks.
Trump framed the bill as securing “the dollar’s status as the world’s reserve currency,” but critics like Senator Elizabeth Warren have raised concerns about potential conflicts of interest, citing links to Trump family-associated crypto firms.
The GENIUS Act is far more than a U.S. regulatory milestone—it is a tectonic event reshaping the digital monetary landscape in Africa. Stablecoins have revolutionized access to financial services and global commerce for millions. Yet, new U.S. regulations could either shore up trust and scalability or entrench dependency and regulatory friction.
Africa stands at a crossroads: it can leap forward as a digital currency innovator and regulator or become a passive consumer of foreign-issued digital dollars. The future of financial inclusion, monetary sovereignty, and economic empowerment hinges on bold, locally driven responses that harness the global momentum while safeguarding regional interests.
As economist Amara Mbaye sums up, “Africa must chart its own digital currency path—learning from global frameworks like the GENIUS Act but adapting them to local realities to ensure digital finance empowers rather than enslaves our economies.”
