Mogadishu (Dawan Africa) – Salaam Bank has officially launched a new service that allows customers to deposit funds in USDT (Tether) or withdraw them in USD directly through their bank accounts, making it the first commercial bank in Somalia to integrate stablecoin transactions into its offerings.
“From now on, you can securely and easily deposit your funds in USDT or withdraw them back into USD with full confidence,” the bank stated in its announcement.
However, the launch comes amid a clear regulatory stance from the Central Bank of Somalia (CBS). In June 2024, the CBS issued a public notice titled “Caution on Virtual Assets,” warning against the use of digital currencies such as Bitcoin and stablecoins like USDT.
“These digital currencies are not recognised as legal tender in Somalia, and no financial institution in the country is currently licensed to conduct activities and operations relating to exchange, transfer, payment, investment, or any other services using virtual assets,” the notice stated.
The advisory outlined various risks, including lack of regulation, susceptibility to illicit activities, high volatility in market value, and the absence of asset backing or recovery guarantees. CBS strongly urged the public not to engage in any investment or transaction involving virtual assets, asserting that such activities are not protected under Somalia’s financial laws.
Given the regulatory framework, Salaam Bank could face legal challenges from authorities over offering services outside the current legal framework for financial operations.
Taran App: Widespread Usage Outside the Banking System
In contrast, Yiksi, an Africa-based fintech company, operates the Taran App, a mobile-first crypto platform that has gained significant traction among Somali users in East and Southern Africa. The app enables users to convert USDT and USDC into USD through a wide network of mobile money services like EVC+, Zaad, Sahal, Jeeb, e-Dahab, Premier Wallet, and M-Pesa. This service has become popular in areas where banking infrastructure is limited.
The app’s simplicity, speed, and broad regional coverage make it highly accessible, especially for users without formal bank accounts.
Binance: Global Player in Somalia’s Crypto Market
Binance, one of the world’s largest cryptocurrency exchanges, is already active in Somalia, offering both on-ramp and off-ramp services that allow users to buy and sell crypto using Mastercard and Visa cards issued by local banks.
With a strong presence across Africa, including Nigeria, Kenya, South Africa, and Uganda, Binance provides Somali users with access to a global trading network, relying on familiar local payment infrastructure.
This regional footprint positions Binance as a formidable player in the Somali crypto market, enabling users to tap into the global digital economy while utilizing accessible payment methods.
As Somalia’s financial landscape rapidly adapts to the digital age, the demand for virtual assets continues to grow, with Salaam Bank, Taran App, and Binance playing critical roles in shaping the future of the country’s financial ecosystem.
