Your Guide to Stablecoins: From Volatile Markets to Strategic Treasury Tools in Africa Absa | Corporate and Investment Banking > Insights and Events > Your Guide to Stablecoins: From Volatile Markets to Strategic Treasury Tools in Africa Nkahiseng Oratile Ralepeli Digital Product Manager: Stablecoin, Absa CIB SHARE African corporate treasurers and bank liquidity managers know all too well the delicate and daily balancing act of managing cash in an unpredictable environment. One day the local currency is sliding, the next day a cross-border payment is in transit. Given this realpolitik landscape, a new toolset is emerging from an unlikely place: the world of stablecoins and their underlying technology. Originally a niche for crypto traders, stablecoins – digital tokens pegged to stable assets like the US dollar, are increasingly relevant to liquidity management and capital allocation. They’re no longer about speculative frenzy; they’re about solving painfully real treasury problems in Africa right now. The African Treasury Tightrope: The key pain points Treasury teams across financial institutions banks corporates in Africa face a cocktail of challenges that would give any CFO heartburn. The core pain points include: Many African currencies are prone to sharp swings and steady decline. From the Nigerian naira’s overnight devaluation to the Ethiopian birr’s rapid slide, local currency instability is a constant threat. These swings erode cash value and make planning near-impossible; yesterday’s surplus can become tomorrow’s shortfall. In countries where currencies can lose value overnight, holding funds in a stable unit is often preferable. Hard currency, especially the US dollar (USD) is king for trade and international obligations, but African firms often struggle to get it when needed. Capital controls and dollar shortages mean treasurers can’t obtain USD to pay suppliers or hedge imports. This dollar liquidity crunch is a daily reality. Sub-Saharan Africa endures some of the highest remittance and payment costs in the world. This isn’t just individuals sending money home, businesses, too, bleed costs and time on international payments. It’s hard to manage liquidity when funds are stuck in transit. After navigating the gauntlet of a cross-border transfer, treasurers face the tedious task of reconciliation. Different banks’ statements and timing mismatches can leave finance teams chasing numbers across systems. It often takes days to confirm that a payment arrived and to update cash position reports. As a result, visibility into cash positions suffers. Real-time treasury is a difficult to achieve when you’re waiting on end-of-day reports from counterparties. Enter Stablecoins: Programmable, Real-Time Liquidity Source How can digital tokens possibly address such entrenched issues? By leveraging the features of blockchain (the technology under the hood) and the design of stablecoins, treasury teams can gain speed, certainty, and control in ways traditional systems struggle to match. Here’s a grounded look at how stablecoins directly tackle the pain points: Stablecoins move at the speed of the internet. If you send USDC from Nairobi to New York, it can settle within seconds or minutes, not days. The key differentiator is that blockchain networks operate 24/7. The result is near-instant settlement. Fewer intermediaries also mean lower fees. This speed and cost efficiency directly free up trapped working capital and reduce transaction costs in trade. Stablecoins like USDC/T are typically pegged to strong currencies (most often the U.S. dollar). For African treasurers, this offers a double benefit. First, using a USD stablecoin in transactions effectively dollarises that transaction, insulating it from local currency swings. Stablecoins are always on, globally accessible via digital wallets – providing a lifeline when the official FX window runs dry. Treasurers can now access dollar liquidity on-demand through digital markets. Stablecoins run on smart contract platforms that enable programmable money. This means cash can now have conditions and logic attached. A stablecoin payment to a supplier could be automated to release only when goods are delivered (embedding escrow-like functions) or split and routed instantly to multiple subsidiaries based on a predefined treasury allocation rule. Every stablecoin transaction is recorded on a blockchain ledger that is, by design, transparent to participants. This means a treasury team can have real-time visibility into its cash movements. Instead of waiting for an end-of-day bank statement, you can open a blockchain explorer and see that a payment has cleared and is sitting in the recipient’s address. Reconciliation that used to take days of back-and-forth can be done almost instantaneously, the ledger shows settlement finality immediately, at any time of day. More Africa-based companies are securing funding, to develop payment ecosystems that utilise blockchain technology and stablecoin trading to achieve cost-efficiency, speed, and transaction transparency for users. All these benefits come with the important caveat: using stablecoins still requires sound risk management. Treasurers must consider counterparty risk of the stablecoin issuer, comply with any capital controls or reporting obligations, and secure the digital wallets (just as they secure online banking credentials). That said, with proper governance, stablecoins function as high-speed, programmable, globally accessible cash – effectively “cash with superpowers.” That’s why even conservative institutions are paying attention. A Strategic Call to Action: Let’s be clear: no one is suggesting that African treasury leaders convert all their cash to crypto or become overnight Decentralised Finance gurus. You do not need to know the intricacies of yield farming or DAO governance to reap the benefits of stablecoins. What is needed, however, is an open mind and a strategic understanding of stablecoins as a new class of programmable cash equivalents. So, Why Now? Because the evidence is mounting that stablecoins can solve pressing issues that traditional methods have so far failed to fix. They offer near-term opportunities to gain efficiency, resiliency, and reach. Ignoring them at this point risks ceding competitive advantage. Consider a competitor who can settle an international invoice in 2 minutes on-chain while you’re still waiting 5 days for a wire to clear. Simply put, their working capital turns over faster. Or a bank down the street that offers customers cheap remittance via stablecoin while your clients still pay higher fees – guess where the volume will go? Treasury teams should start by educating themselves and their organisations. Initiate discussions with your banking partners about stablecoin-based services – many banks are already exploring (or even piloting) stablecoin use for cross-border payments and liquidity management. Update your treasury policies to allow holding or transacting small amounts of major stablecoins under controlled conditions, perhaps for specific use cases like pilot trade transactions or intracompany transfers. Near-term action items could include running an internal stablecoin pilot for a low stakes use case in partnership with your banking partner. For example, test a payment to an overseas vendor for a small invoice and let both your finance team and the vendor experience the speed difference. Or use a stablecoin to internally transfer funds between two country subsidiaries within your firm, then convert to local currency with your banking partner. These experiments will build confidence and reveal practical considerations (wallet custody, accounting treatment, etc.) in a manageable way. Simultaneously, look at Treasury Management System (TMS) integrations: some TMS providers now allow you to monitor crypto wallet balances alongside bank accounts. Even if you don’t deploy it immediately, knowing it’s possible positions you to move quickly when needed. In conclusion, think of stablecoins as the next evolution of digital money that plays by a new set of rules: faster, smarter, and more transparent. Much like treasury teams adapted to electronic banking, SWIFT, and ERP systems in the past, the time has come to adapt to tokenised, programmable money. Rob DownesHead of Digital Assets, Absa CIB https://cib.absa.africa/wp-content/uploads/2020/07/file_example_MP3_700KB.mp3 Related Articles RISK MANAGEMENT Africa Blockchain Report 2025: Blockchain’s Multifaceted Role in Economic Development The newest blockchain activity across Africa is highlighting the dynamism of this technology, with use cases emerging that demonstrate exciting new developmental opportunities beyond its crypto transaction roots. As South Africa prepares to host the first G20 summit in Africa, a key theme set to be discussed throughout both the B20 (Business20) and G20 task teams is inclusive digital development. 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