By 2028, African fintech companies with international exposures or are participating in the broad global remittance business that do not integrate stablecoins will be disintermediated. The growth of stablecoin is accelerating at a very fast pace since institutional rainmakers normalized the sector via the establishment of ETFs for BTC and ETH. In other words, writing about bitcoin, ethereum, etc will not get you fired since your bank may be trading on the ETF associated with those coins!
As that happens, I do think that BTC will finally stabilize as a store of value, becoming a new species of assets (crypto-asset). In the crypto ecosystem, stablecoins like USDC, USDT ERC-20, USDT TRC-20, BUSD, and some no-USD variants will become the real “cryptocurrency”; yes, coins you actually use as a currency, for buying and selling, and not the one you hodl.
Now that we are in 2025, let me repeat this post I made in Oct 2024 as I examine where this market is moving to.
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I am coming to an early conclusion that Bitcoin will end up like a digital equivalent of gold. Yes, an asset class that mainly stores value. But since it does not have a physical component like gold, its long-term viability is not guaranteed.
But as that happens, it is looking like the future is stablecoin within the crypto universe. Two years ago, many people paid for our Tekedia programs with BTC and ETH. But since Q4 2023, more than 90% of such crypto payments have been via USDT (ERC-20) and recently USDC.
Simply, stablecoins are gaining popularity over Bitcoin and that could be the fact that people want predictability in value (1 USD is 1 USD, today and tomorrow), even when transaction costs and frictions are largely eliminated. The everyday use of stablecoins as a simple medium of exchange poses challenges for the long-term viability of BTC for payment. Yes, there is a clear risk of disintermediation for BTC, and that could affect its value.
Looking at Nigeria, a better crypto business will likely go through having a stablecoin version of Naira backed by strong settlement reserves, and not on buying and selling BTC since I do posit that in 5 years, many will move BTC to a pure investment asset class, reducing the marginal transaction fees. Without that revenue, what is going to be the business?
Circle and Tether, creators of USDC and USDT, respectively, are looking better than Coinbase because those stablecoins will become more popular, distorting fees which exchanges make from BTC. This explains why Binance with its stablecon BNB seems to have a moat in many ways. For many African players, this market is being redesigned and it looks like winning in the future will require building infrastructure in the local market and that means running native exchanges with associated stablecoins.
*not endorsing crypto in any way; just a teacher analysing tech and markets.
