By Mohamed Ali - Technology & Digital Economy Commentary
April 23, 2026 - In October 2025, South African Reserve Bank Governor Lesetja Kganyago gave a warning that many policymakers are only now beginning to fully understand.
“The creation of stablecoins, especially dollar stablecoins, is being used to undermine African currencies. People are almost creating their own foreign exchange in that route, and I worry that some countries might actually lose monetary sovereignty.”
That concern is no longer theoretical.
In the same month Kganyago made those remarks, Nigeria’s central bank quietly formed a 15-member task force—not to stop stablecoins, but to understand them.
Because by then, the shift was already underway.
Nigerians were moving an estimated $92 billion in digital assets annually. Surveys showed that 95% of crypto-active users preferred receiving payments in stablecoins over the naira.
Not occasionally. Consistently.
Across Sub-Saharan Africa, the scale is even larger.
Between July 2024 and June 2025, $205 billion moved through digital financial rails—a 52% increase from the previous year. Much of that value flowed through dollar-denominated stablecoins operating outside the direct oversight of African central banks.
To understand why, you have to look at what local currencies have been through.
Since 2023, Nigeria’s naira has lost more than 60% of its value against the dollar. Inflation rose above 26% in 2025. For many households, savings held in local currency lost more than half their value in just two years.
So people moved.
Not into banks.
Not into traditional assets.
Into digital dollars.
Stablecoins like USDT—issued by private companies and backed by U.S. Treasury assets—have become a preferred store of value.
This creates a structural shift.
The Central Bank of Nigeria spent decades building a monetary system. But a private entity, operating outside its jurisdiction, is now providing the currency many citizens trust more.
It mirrors what happened in telecoms.
Telecom companies built infrastructure over decades. Then WhatsApp, a relatively small platform at the time, became the dominant communication channel globally.
Same pattern. Different system.
But this time, the consequences run deeper.
When WhatsApp replaced SMS, telecom operators still controlled the infrastructure and retained part of the value chain.
When stablecoins replace local currencies, central banks lose far more.
They lose seigniorage.
They lose monetary control.
They lose the ability to influence inflation through interest rates.
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Because the currency people are actually using does not respond to domestic policy.
This is what Kganyago meant by “losing monetary sovereignty.”
And that loss has real consequences.
Monetary sovereignty is not abstract. It determines whether governments can stabilise prices, support employment, and finance public services.
When that control weakens, policy tools weaken with it.
Global financial institutions are already modelling the impact.
Standard Chartered warned in 2025 that dollar stablecoins could pull up to $1 trillion in deposits from emerging market banking systems over the coming years. Countries such as Nigeria, Kenya, Egypt, and Pakistan were identified as particularly exposed.
That shift is not just about money moving.
It is about control moving.
Funds that once sat in local banks—supporting lending and economic activity—are increasingly flowing into external digital systems governed by private entities.
However, unlike the telecom disruption, some African regulators are responding earlier.
Nigeria has already taken steps, launching the cNGN, a regulated, naira-backed stablecoin under joint oversight from the central bank and securities regulator.
The strategy is clear: if digital money is inevitable, build a local alternative before external systems dominate completely.
This approach echoes earlier success stories.
Kenya leveraged mobile money infrastructure to create one of the most inclusive financial systems globally. Rwanda is experimenting with regulatory sandboxes to test new financial models.
The window to act still exists.
But it is narrowing.
$205 billion in one year.
52% growth.
No sign of slowing.
The telecom sector took a decade to respond to platform disruption.
By then, the market had already shifted.
African central banks do not have that kind of time.