Africa Tops Global Stablecoin Costs, Exposing High Conversion Barriers

Stablecoin users in Africa have been reported to pay more to convert their digital assets into local currencies than anywhere else on the planet.
According to the new data that tracks stablecoin-to-fiat exchange rates across more than 66 corridors and 33 currencies the African stablecoin market has accounted for the highest cost globally.

The data, which focused on about 13 African currencies, and almost 94,000 rate observations, reveal a huge difference in the amount it costs to convert tokens across different continents of the world.
The cheapest of all the African continents is South Africa, and it records conversion costs of 152 basis points (bps), while Botswana stands as the most expensive at 1,944 bps, which is a 13x difference compared to South Africa which is in the same region.
This kind of variation just highlights how much the digital assets market remains very uneven when it comes to access and pricing structure.

Also Read: Tether Partners With UNODC to Strengthen Cybercrime Prevention Across Africa

An important insight to highlight from the data is that provider competition plays a decisive role in determining costs. In corridors where multiple digital assets providers operate, the spread is typically between 150 and 410 bps.
However, in markets that are dominated by a single provider, the conversion costs can exceed 1,300 bps, significantly raising the barrier to entry for users seeking to move between stablecoins and local fiat currencies.

Africa Dominance in the Stablecoin Spread Extremes

Looking in depthly into the data provided by borderless.xyz, it points to the fact that Africa’s result differs from the other continents of the world. The other five tightest corridors worldwide all located outside Africa range from just 7 bps in the Philippine peso (PHP) corridor to 100 bps in the Chilean peso (CLP) corridor.
By contrast, the five widest spreads globally are all African: Botswana (1,944 bps), Democratic Republic of Congo (1,311 bps), Zambia (850 bps), West African CFA franc (XOF) at 594 bps, and Central African CFA franc (XAF) at 513 bps. This concentration clearly suggests that nearly all global dispersion in stablecoin foreign exchange spreads is driven by African markets.

Source: Borderless.xyz

On average, conversion costs in Africa stand at 299 bps making the continent 2.3 times more expensive than Latin America and 44 times more expensive than Asia.

Also Read: Bitcoin Cash (BCH) Tests Resistance as Analysts Warn of $475 Retest