Stablecoin Use for Cross-Border Payments: Empowering African Migrants

Kotani Pay
6 min readJun 16, 2023


Migrants play a crucial role in the economic development of both their host countries and their countries of origin. For many people and families in Africa, remittance transfers are a vital lifeline that allows them to receive financial assistance from loved ones abroad. However, sending money back to their families and communities through traditional cross-border payment methods can be costly, time-consuming, and inefficient.

Stablecoins have become a game-changing solution in recent years, providing important benefits over conventional remittance techniques.

Here are the facts

International Organization on Migrants estimates that there there are 281 million migrants across the world as of 2020 with 40 million of these being Africans. These migrants contribute most to low and middle-income countries. In fact, their contribution is three times greater than development aid and surpasses foreign direct investments. World Bank further notes that remittances to sub-saharan Africa reached a record high of $53 billion as of 2022.

Despite the significant impact remittance has on developing countries, the cost of sending money across borders is still above the SDG goal of 3% with Sub-Saharan Africa having the highest average remittance cost of about 7.8%.

Stablecoin and remittance

Leveraging blockchain technology, stablecoins are quickly gaining attraction as a preferred remittance alternative. Sender and receiver can bank on the trust that comes with the decentralized technology.

According to data sourced from Coingecko and Mastercard, and Visa’s respective websites, USDT, the most dominant stablecoin has surpassed Mastercard and Visa in transaction volume. USDT processed $18 trillion in transactions in 2022 while Visa processed $14 trillion and Mastercard $7 trillion.

So, what benefits do migrants stand to gain from stablecoin?

1. Cost Savings

One of the most notable benefits of adopting stablecoins for cross-border payments is how much migrants get to save on cross-border transactions. Traditional transfer methods frequently require exorbitant fees, currency conversion charges, and unfavorable exchange rates, reducing the amount of money received by recipients in Africa significantly.

Stablecoins, on the other hand, run on decentralized blockchain networks, which eliminates the need for intermediaries and lowers transaction fees. Migrants can send funds directly to their loved ones in Africa at a low cost by avoiding the middlemen involved in their transaction, ensuring that a bigger amount of their hard-earned money reaches the intended beneficiaries.

2. Faster Transactions

Another important advantage of using stablecoins for cross-border payments is the speed with which transactions may be handled. Traditional remittance techniques might cause delays and inconveniences by taking several days or even weeks for payments to reach recipients in Africa. This can be attributed to intermediaries involved in transactions to banking holidays that will increase the time money is remitted back home.

Stablecoins, which use blockchain technology, allow for near-instantaneous transactions. Migrants can use stablecoins to initiate transfers, and the money can be received by to their recipients within minutes. This rapid transfer of funds guarantees that recipients have access to funds when they are most needed, addressing immediate financial demands and facilitating speedier economic activity.

3. Financial Inclusion

Stablecoins provide a path to financial inclusion for African migrants and their families. Many people in the region lack access to official financial services, making it difficult to receive remittances through traditional methods.

Stablecoins, on the other hand, provide a digital solution that can be accessed via mobile devices and digital wallets. Migrants can send funds straight to these digital wallets, allowing their families to receive and manage the funds electronically.

The Kotani Pay USSD solution offers users blockchain functionality without access to the internet. Migrant families can receive remittances using their feature phones and are able to cash out directly to their mobile money wallet. The recipient's phone numbers become the wallet address that enables them not only to receive digit assets but to also tap into the blockchain ecosystem such as Decentralized Finance to get credit or earn yield.

A user withdraws their stablecoins directly to their mobile money using a second-generation phone

4. Security and Transparency

Compared to typical remittance techniques, using stablecoins for cross-border transfers delivers increased security and transparency. Stablecoins are based on blockchain networks, which provide immutable and transparent transaction records. This transparency means that transactions can be traced and validated, lowering the risk of fraud and improving overall remittance security.

Migrants may rest easy knowing that their hard-earned money is being securely transmitted to their families without the risk of it being intercepted or misappropriated. Furthermore, because stablecoins are decentralized, there is no need for intermediaries, lowering the risk of any errors or disruptions in the payment process.

5. Convenience and Accessibility

For migrants making cross-border remittances back to Africa, stablecoins provide exceptional convenience and accessibility. Traditional remittance methods frequently include physical trips to money transfer operators or banks, which can be time-consuming and uncomfortable, particularly for migrants living in remote areas.

In contrast, stablecoins are digital assets that can be stored and accessed via mobile devices and digital wallets. Migrants can initiate payments at any time and from any location, giving them the convenience and flexibility to easily support their families in Africa. This accessibility ensures that financial assistance reaches users quickly, especially in emergency situations.

6. Empowering Economic Development

The use of stablecoins for cross-border payments by migrants has the potential to boost economic development in Africa. Stablecoins offer increasing financial support to African families and communities by enabling faster, cheaper, and more secure remittance transactions. This infusion of capital can help local businesses, promote education and healthcare, foster entrepreneurship, and contribute to general economic growth. Migrants who use stablecoins become good change agents, fostering financial empowerment and resilience in their home countries.

Cross-border partnerships

Cross-border partnerships between Money Transfer Operators (MTOs), Payment processors, and stablecoin settlement providers have the potential to address migrant remittance challenges and foster the growth of the industry. These strategic collaborations leverage the strengths of both parties to create innovative solutions that address the pain points faced by migrants when sending money across borders.

By partnering with stablecoin settlement providers such as Kotani Pay, MTOs can leverage the speed and efficiency of blockchain technology to streamline the settlement process. These digital assets, operate on blockchain networks, enabling near-instantaneous transactions, eliminating the need for intermediaries, and reducing settlement times from days to minutes. This enhanced speed and efficiency translate into quicker access to funds for recipients, enabling them to meet their financial needs more promptly.

As stablecoin adoption continues to grow, the opportunities for migrants to harness the power of these digital assets for cross-border payments will continue to expand, ultimately transforming the lives of individuals and contributing to the advancement of Africa as a whole.

Are you ready to tap into the transformative power of stablecoins and unlock a world of financial opportunities? Join the growing community of individuals and businesses harnessing the benefits of stablecoins in Africa using Kotani Pay.



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