The Rise of Stablecoins

Over a decade ago, stablecoins were simply a way to facilitate transactions on blockchain networks. However, through years of experimentation, market cycles, regulatory scrutiny, and growing institutional interest, they have evolved from a niche cryptocurrency tool into a market worth hundreds of billions of dollars. The timeline below illustrates this evolution.

 

Evolution of Stablecoins. Compiled by the author using information from Eco and Plasma.

 

The growth of stablecoins has not been driven by technological innovation alone. Their adoption has accelerated because users have continued to find practical ways to solve real-world problems. What began as a tool for cryptocurrency trading has expanded into a growing range of use cases, including:

 

 

Are Stablecoins Really Something New?

Long before the colonial era, many African societies used a variety of currencies, including cowries, gold dust, cloth, iron bars, copper, and salt. Unlike many parts of Europe, where rulers increasingly sought to control the issuance and circulation of money, many African currencies emerged and functioned without direct state control. As noted in African Economic History: From Commodity to Colonial Currencies in West Africa (2025), “the choice of currency was made in principle by the parties to the transaction.” The authors go on to observe that “there is a parallel with the cryptocurrencies of the present, in that they were not generally regulated by the state.” In other words, many of these assets functioned as money because merchants and communities collectively chose to use them as such. So whilst African currencies at this time were not digital, like stablecoins they were built on a similar foundation: trust. Cowries, gold dust, cloth, iron bars, and other commodities functioned as money because people collectively agreed to treat them as stores of value and mediums of exchange.

Similar parallels can be found elsewhere in history. According to the Federal Reserve Bank of New York (2025), stablecoins share important similarities with the privately issued national bank notes that circulated in the United States between 1863 and 1935. Like stablecoins, these notes were issued by private institutions, backed by government securities, and designed to maintain convertibility into government money at par value. In both cases, trust in the backing assets and the issuer played a critical role in supporting adoption.

 

 

Across both pre-colonial Africa and nineteenth-century America, societies developed forms of money that existed alongside, or in some cases outside, direct state issuance. While the technology has changed dramatically, the underlying question remains remarkably similar: what assets do people trust to store value and facilitate exchange? In many respects, stablecoins represent a modern, digital answer to a challenge that societies have been addressing for centuries. Their novelty lies not necessarily in the idea of privately trusted money, but in the ability to issue, transfer, and settle it globally through programmable digital infrastructure.

While the concept may not be new, questions remain as to whether stablecoins can maintain the trust, stability, and acceptance required to achieve widespread use.

 

The Questions That Remain

Despite their potential, several important questions remain before stablecoins can become a widely adopted form of money for businesses and individuals.

Trust & Stability

• Can stablecoins consistently maintain their peg? Stablecoins derive much of their value from their ability to maintain a stable exchange rate. However, history has shown that de-pegging events can and do occur. Confidence shocks, banking disruptions, liquidity imbalances, and redemption pressures have all caused major stablecoins to trade away from their intended value at different points in time. Events such as the collapse of TerraUSD in 2022 and USDC’s temporary de-peg following the collapse of Silicon Valley Bank demonstrate that maintaining stability is not always straightforward. (J.P. Morgan, 2025)
• Can issuers balance stability and profitability? As highlighted by the BIS, there is an inherent tension between a stablecoin’s promise that users can always get back the value they were promised and the need for issuers to generate returns from the assets backing the stablecoin. Earning higher profits often requires taking liquidity or credit risk, yet those same risks can undermine the redemption guarantee that gives users confidence in the stablecoin in the first place.

Regulation & Compliance

• How should stablecoins be regulated? Regulatory frameworks continue to evolve globally, while approaches across African markets remain fragmented. Some jurisdictions have embraced innovation sandboxes and pilot programmes, while others remain cautious or have yet to establish dedicated frameworks. For businesses operating across multiple African markets, differing regulatory approaches can create uncertainty around licensing, compliance, and product design.
• Can compliance keep pace with adoption? Stablecoins can move across borders without many of the traditional intermediaries used in the banking system. While this can improve efficiency, it also raises concerns around money laundering, sanctions compliance, terrorist financing, and customer identification, particularly where self-hosted wallets are involved, as identities may not be verified in the same way as they are on regulated exchanges or financial platforms.

Infrastructure & Accessibility

• Can users easily move between stablecoins and local currencies? Most day-to-day transactions still take place in local fiat currencies, meaning users need a reliable way to convert stablecoins into local money. However, in many African markets, liquidity, banking partnerships, and off-ramp infrastructure remain limited, reducing some of the cost and speed advantages stablecoins promise.
• Can stablecoins reduce fragmentation? While stablecoins can simplify cross-border payments, they operate across multiple blockchains, wallets, and liquidity networks that are not always interoperable. For a continent already characterised by fragmented payment systems, currencies, and regulatory frameworks, there is a risk that new forms of fragmentation emerge alongside the old ones.
• Will costs remain low at scale? Stablecoins are often promoted as a low-cost payment mechanism, but transaction fees (commonly known as gas fees) can rise significantly during periods of network congestion. According to Bank of America, fees on some blockchain networks have increased from less than $0.10 to more than $20 during periods of heavy activity.

Economic Implications

• What happens if people start using U.S. dollar stablecoins instead of local currencies? More than 99% of stablecoins are denominated in U.S. dollars (BIS, 2025). Widespread adoption could increase dependence on the U.S. dollar and reduce the effectiveness of domestic monetary policy. 
• How should irreversible transactions be managed? Unlike many traditional payment systems, stablecoin transactions are generally irreversible. While this can improve settlement finality and reduce certain operational risks, it can also create challenges when mistakes, fraud, scams, or lost private keys result in funds becoming unrecoverable.

The same characteristics that make stablecoins attractive also create many of their biggest challenges. How these questions are answered may ultimately determine the role stablecoins play in Africa's financial future. Despite these uncertainties, stablecoins continue to evolve. So what might the next chapter look like?

 

The Next Chapter for Stablecoins

If the first decade of stablecoins was largely defined by cryptocurrency trading, the next decade will likely be defined by integration into the broader financial system. The next phase of stablecoin adoption is likely to be shaped by three parallel developments: 

 

 

The Race Toward Mainstream Adoption

One of the most important shifts is that stablecoins are increasingly being used for purposes beyond cryptocurrency trading. Today, more than 90% of stablecoin activity remains linked to crypto trading, suggesting that many of the use cases discussed earlier in this article are still in their infancy. Yet this is precisely where much of the future opportunity may lie.

For Africa, this shift could be particularly significant. Many of the continent's most pressing financial challenges (access to foreign currency, cross-border trade, fragmented payment systems, and treasury management) are real-world problems that stablecoins are well positioned to address. Moreover, this opportunity is increasingly being recognised by major industry participants. For example, in June 2026, Ripple participated in Flutterwave's Series E funding round as part of a strategic partnership focused on expanding stablecoin-enabled payments infrastructure across Africa.

Stablecoins are also attracting growing interest from some of the world's largest payment companies. Mastercard's proposed acquisition of stablecoin infrastructure provider BVNK  for up to $1.8 billion follows Stripe's acquisition of Bridge in 2025 and reflects growing confidence that stablecoins are becoming an important part of the future payments ecosystem.

According to Chainalysis (2026), an estimated $100 trillion of wealth is expected to transfer from Baby Boomers to Millennials and Generation Z between 2028 and 2048. As younger generations are significantly more likely to have interacted with digital assets, this transition could help accelerate the adoption of stablecoin-based financial services over time.

 

New Financial Products and Markets

While much of today's stablecoin activity remains concentrated in payments and trading, stablecoins are increasingly becoming the financial layer for a broader digital financial ecosystem.

Examples already emerging include: 

• African currency-backed stablecoins such as Nigeria's cNGN and emerging initiatives linked to currencies such as the Tanzanian Shilling, which could help address some concerns around dollarisation.
• Tokenized money market funds and other real-world assets, which expand the range of assets that can move on-chain.
• New approaches to credit infrastructure that embed programmable capital directly into payment flows, potentially improving capital efficiency, reducing the need for pre-funding, and expanding access to financing.

At the same time, a growing number of financial institutions are entering the market through initiatives such as PayPal's PYUSD and USDG, reflecting increasing competition to participate in the expanding stablecoin ecosystem.

Looking further ahead, stablecoins may also play an important role in supporting new forms of digital commerce. As blockchain networks allow AI agents to hold wallets and transact autonomously, some analysts believe stablecoins could become an important payment mechanism for machine-to-machine transactions and AI-driven economic activity.

 

Scaling the Infrastructure Layer

Widespread adoption will ultimately depend not only on stablecoins themselves, but on the infrastructure that makes them easy, secure, and compliant to use. Much of the next phase of innovation is therefore focused on reducing the friction associated with stablecoin adoption. This includes expanding payment acceptance, simplifying the technical complexity of integrating stablecoin functionality into existing products, improving compliance through advances in artificial intelligence, and enabling interoperability across multiple blockchain networks. If stablecoins achieve widespread adoption, many users may ultimately interact with stablecoin-powered services without ever realising that blockchain technology is operating behind the scenes. 

Ultimately, the next chapter of stablecoins may be less about the stablecoins themselves and more about the infrastructure built around them. As adoption expands, fintechs will increasingly require solutions that simplify wallet management, payments, compliance, settlement, and interactions across multiple blockchain networks. This is where Blockradar fits in, providing the infrastructure that enables fintechs to build and scale stablecoin-powered products without having to manage the underlying blockchain complexity themselves.

 

Introducing Blockradar: Powering Stablecoin Adoption Without Blockchain Complexity

The promise of stablecoins is compelling, but deploying stablecoin-powered services remains technically complex. Fintechs often require specialist blockchain engineers to build and manage wallet infrastructure, treasury workflows, compliance controls, and integrations across multiple blockchain networks before launching stablecoin-enabled products. Blockradar was founded to solve this challenge.

Through a single API, Blockradar enables fintechs to integrate stablecoin payments, treasury functionality, and programmable wallets into their products. By abstracting much of the underlying complexity, it allows fintechs to focus on building customer-facing financial products rather than managing blockchain infrastructure. While its infrastructure can support a broad range of use cases globally, Blockradar is particularly focused on helping fintechs operating across emerging markets, where moving value across borders can often be complex, fragmented, and costly.

Blockradar's key capabilities include:

• Programmable Wallet Infrastructure: Enables fintechs to launch stablecoin wallets without building custody and wallet management systems from scratch, allowing customers to hold, send, receive, and manage digital assets across multiple blockchain networks.
• Treasury Management: Helps fintechs manage stablecoin liquidity at scale through automated treasury workflows, balance consolidation, fund sweeping, and yield-generating treasury products, enabling capital to be deployed more efficiently.
• Embedded Compliance: Integrates transaction monitoring, sanctions screening, audit trails, and other compliance controls directly into payment workflows, helping fintechs meet regulatory requirements while reducing operational complexity.
• Multi-Chain Infrastructure: Abstracts the complexity of operating across multiple stablecoins and blockchain networks, allowing fintechs to scale across different ecosystems through a single integration.
• Payment Acceptance Infrastructure: Enables fintechs to accept stablecoin payments through branded checkout experiences, payment links, QR codes, and API-driven workflows, helping integrate stablecoin payments into existing customer journeys.

Together, these capabilities enable fintechs to launch stablecoin-powered products such as cross-border payment solutions, multicurrency wallets, treasury platforms, savings products, and payout services without building blockchain infrastructure from scratch.