Stablecoin Flows in Africa Accounted for 6.7% of Global GDP in 2024, According to the IMF

Stablecoin Flows in Africa Accounted for 6.7% of Global GDP in 2024, According to the IMF - One of the Highest Rates Worldwide

In a significant development, the International Monetary Fund (IMF) has published a comprehensive report titled "Decrypting Crypto: How to Estimate International Stablecoin Flows," shedding light on the global landscape of stablecoin transactions.

The report reveals some intriguing trends in stablecoin usage across the globe. For instance, North America records the largest average transaction size at $35,016, while Asia & Pacific has the smallest at $11,493. This disparity could be attributed to various factors, including economic conditions and regulatory frameworks in these regions.

One of the most striking findings is the high level of cross-border activity in stablecoin transactions. Africa, for example, is largely involved in cross-border flows, with only 14% of flows staying within the region. Interestingly, net flows into Africa largely originate from North America, which is identified as the "primary exporter" of stablecoins to meet global dollar demand.

In 2024, approximately 138 million stablecoin transactions worth a total of $2.019 trillion were mapped by the IMF dataset. A significant portion of these transactions, $309 billion, flowed entirely between self-custodial wallets, while $569 billion moved between centralized exchanges. Notably, self-custodial wallets are involved in at least 72% of stablecoin transaction volume.

The report also highlights the prevalence of stablecoins in business transactions. In Kenya, for instance, 49% of private firms use USDT for paying foreign suppliers. The USDC stablecoin, known for its stability and acceptance in global payment networks, is the most widely used variant for cross-border transactions in Kenya's fintech and export-related firms.

Regional preferences for stablecoins also emerge from the report. USDT is more popular in emerging market regions such as Africa, the Middle East, Asia & Pacific, and Latin America & Caribbean, while USDC is more common in advanced economies like Europe and North America.

Africa and the Middle East have one of the highest levels of stablecoin usage globally, equivalent to 6.7% of GDP in 2024. Only Latin America & the Caribbean surpasses Africa in stablecoin usage relative to economic size.

Binance leads in handling Africa's centralized exchange-linked stablecoin volume, accounting for 74% of the transactions. TRON is the preferred blockchain for B2B transfers in stablecoin transactions.

Despite global market volatility, Africa's stablecoin activity has grown, suggesting strong underlying utility beyond speculation. Chinese tech giants are also ramping up offshore Yuan stablecoin lobby as dollar-pegged tokens dominate global payments.

The IMF report provides valuable insights into the global stablecoin landscape, offering a comprehensive picture of this burgeoning sector. As stablecoins continue to evolve and gain traction, further research and analysis will be essential to understand their impact on the global financial system.

Stablecoin Flows in Africa Accounted for 6.7% of Global GDP in 2024, According to the IMF - One of the Highest Rates Worldwide