The complex financial environment in many African nations—characterized by banking limitations, currency volatility, and regulatory uncertainty—has long presented significant challenges for foreign enterprises seeking market entry. These barriers not only hinder daily operations but also deter potential investment. In response, blockchain-based crypto payment channels are increasingly being adopted as a critical alternative.
As explored in prior analyses, while stablecoins excel at enabling instant value transfer—a core capability of blockchain—payment systems involve more than simple peer-to-peer transactions. The entire process, often described as a ‘stablecoin sandwich,’ still relies on traditional financial systems at both endpoints for fiat on/off-ramping, ultimately connecting to the target country’s banking infrastructure.
Consequently, crypto Over-The-Counter (OTC) trading has become a central component for stablecoin payment companies, particularly in African markets with illiquid local currencies and foreign exchange controls. The absence of robust traditional financial infrastructure has spurred the growth of crypto OTC markets, which provide efficient services for converting between fiat and stablecoins securely and rapidly.
With Africa and the global economy accelerating their embrace of digital innovation, crypto and stablecoin payment channels offer enterprises a strategic opportunity to expand in dynamic markets.
### Executive Summary
OTC cryptocurrency trading is rapidly becoming essential for global businesses to participate seamlessly in Africa’s digital financial ecosystem. By facilitating large, peer-to-peer crypto transactions outside traditional exchanges, the OTC model addresses structural weaknesses in conventional banking, offering a secure and compliant pathway for institutional-scale settlements.
In 2024, global OTC crypto trading volume surged by 106% year-over-year, with stablecoin activity growing 147%. African platforms like Quidax and Busha have leveraged this model to enable efficient, large-scale transactions. These services allow businesses to meet liquidity needs with minimal market impact, achieve real-time fiat settlements, and navigate simplified compliance access in high-growth markets such as Nigeria, South Africa, and Ethiopia.
Africa’s crypto landscape is undergoing rapid transformation. Driven by a median age of just 19.2 and over 60% of the population unbanked, the continent presents a unique demographic and economic impetus for digital financial solutions. Cryptocurrency has evolved from retail speculation to practical utility, particularly in cross-border payments and as a hedge against inflation.
Nigeria processed approximately $59 billion in crypto value last year, ranking second globally behind India. South Africa and Kenya are also showing strong momentum, aided by mobile wallet integration and relatively friendly crypto policies.
Stablecoins have become the dominant settlement asset, accounting for 43% of all crypto transactions in Sub-Saharan Africa (SSA). Their price stability, real-time settlement, and transparent audit trails make them highly attractive. Nigeria alone absorbs over 40% of SSA’s stablecoin inflows, with Ethiopia and Zambia experiencing annual growth rates exceeding 100%.
Businesses are increasingly using USDT and USDC to hedge foreign exchange volatility, simplify import processes, and accelerate cross-border settlements. Stablecoin trading volumes have now surpassed Bitcoin in most African regions.
Although regulatory approaches remain cautious, many African governments are shifting from outright bans to active engagement. Nigeria’s issuance of crypto licenses in 2024 marked a turning point, sparking renewed commercial interest. Ghana, South Africa, and Kenya are also advancing Central Bank Digital Currency (CBDC) projects and regulatory sandboxes, providing clearer paths to compliance. Industry leaders from Busha and Xago advocate for a hybrid approach balancing innovation, governance, and risk management.
OTC trading has achieved product-market fit across multiple sectors: Banks and payment providers embed stablecoin channels into fund flows; manufacturers and importers use OTC swaps to avoid slippage and banking fees; and digital businesses leverage crypto channels for fast user onboarding and real-time settlements. Quidax’s expansion into South African Rand (ZAR) and Ethiopian Birr (ETB) channels demonstrates this sectoral momentum, while infrastructure providers like Kotani Pay integrate API-based stablecoin-to-fiat conversion directly into mobile wallet ecosystems.
The regulatory stance is transitioning from comprehensive prohibition to licensing and sandbox frameworks. In 2024, Nigeria’s SEC granted operational permits to multiple Virtual Asset Service Providers (VASPs), while South Africa’s FSCA issued dozens of crypto asset licenses. However, divergent regulatory frameworks across more than 15 African countries create compliance complexity for cross-regional players.
Looking ahead, programmable stablecoin channels and API-driven OTC platforms will become invisible infrastructure, integrated into enterprise ERP and fintech applications. Alongside frameworks like the African Continental Free Trade Area (AfCFTA), they will underpin cross-African trade. Institutional crypto asset reserves and CBDC pilots in West and East Africa will further blur the lines between fiat and crypto settlement, ushering in a new era of 24/7, dollar-equivalent liquidity for the continent.
