Introduction

The use of stablecoins – a type of cryptocurrency that is supposed to be backed by the US dollar or another reference asset – is likely to be given a further boost in Africa, with the African government making moves to promote uptake and Africans increasingly adopting stablecoins for cross-border payments and other transactions.

Stablecoins are a specific form of cryptocurrency which, in contrast to the high degrees of volatility seen in the prices of Bitcoin and other cryptos, aim to maintain stable values and thereby offer users the ability to make cross-border payments in a cheap and quick way.

To maintain this stability, they are backed by currency reserves, normally the US dollar. The two largest stablecoins currently available on the crypto market are Tether (USDT) and USD Coin (USDC), both of which claim to be backed 1:1 to US dollars or US Treasury securities.

Stablecoin usage increases as currencies devalue

Nonetheless, stablecoins are growing in popularity in Africa, where many countries face economic problems including high levels of inflation, rapid currency depreciation, and a shortage of foreign currency reserves – factors which have long driven cryptocurrency adoption in Africa. Advocates say the dollar-backed security of genuine stablecoins can be useful for both businesses and individuals wishing to facilitate international payments or simply protect the value of their assets.

In the past couple of years consumers and small businesses have increasingly turned to stablecoins as a proxy for the US dollar – hoping that it would retain its value amid high inflation in Nigeria and a weakening domestic currency. Similar trends have been seen in Ethiopia.

Stablecoins emerged as an on-and off-ramp to the crypto ecosystem and a means to enable transactions on the blockchain without the inherent volatility of other forms of crypto. In a nutshell, they are crypto tokens that live on decentralised ledgers and promise to always be worth a fixed amount in fiat currency (eg one dollar). Unlike unbacked crypto coins, most stablecoins are issued by a single, central entity.

Demand for stablecoins is a function of both users' motivations and some of their features, including accessibility, privacy, their role as an alternative to the current financial system, their ability to facilitate access to foreign currencies and their attractiveness in cross-border payments.

First, stablecoins are traded on public, permissionless blockchains, allowing anyone with an internet-connected device to access them. Many users do so through hosted wallets provided by crypto exchanges that perform onboarding processes, which in principle should be similar to banks. But it is also possible to access stablecoins directly via unhosted wallets, which are readily available to any user with an internet connection. 

Why Businesses Are Turning to Stablecoins in Ethiopia in 2025 

The idea of the stablecoin is that these are blockchain-based crypto assets always pegged to the value of a fiat, such as the USD. The ultimate growth of digital forms of money is the epitome of cryptocurrency transactions in businesses and on a personal level;

1. Reduced Transaction Costs 

International settlements and cross-border e-commerce transactions are expensive due to the high transmission costs of the increased banking system. However, using stablecoins requires no intermediaries, eliminating these costs. 

2. Quicker Settlements 

It was typical in the past for international bank transactions to take several days to complete. The attraction of stablecoins is that they allow swift transactions, often in just a few seconds. This will be most helpful, particularly for businesses that can take advantage of the time saved by these means while working across borders- since the more work is completed, the more results are achieved. 

3. Increased Security & Transparency 

Blockchain is a system that operates in such a way that it can provide the details of every transaction in a secure, unalterable, and standard record book that is immune to data compromise or access by other parties. Blockchain is such a system that pieces of the Payment method can be traced back to the source; meanwhile, no one can tamper with the security process. 

4. The Efficiency of Cross-Border Payment 

With stablecoins, everyone can have an immediate need as they are the best recourse, using the least effort around the supposed obstructions on bank-clearance issues and currency exchange. They also save time by letting you send the money whenever it is due.

5. Improved Access to Global Financial Services 

In the coming years, stablecoin platforms can be instrumental in streamlining business operations, particularly for developing countries, which are most affected by limitations to global transactions based on currency and physical border restrictions. 

How Businesses Use Stablecoins 

1. Payments Acceptability 

Stablecoin payment gateways are one of the ways that a company can enable more transactions with its customers anywhere in the world to be of higher environmental value. This is the best private enterprise transaction so far! Digital invoices have recently gained ground as they are instrumental in software-as-a-service (SaaS) invoicing. 

2. Stablecoin Remittances and Payroll 

Digital payments can generate extra income from the cloud. Business is realized through the Internet, and people do everything from their comfort zones. 

3. Business-to-Business (B2B) Transactions 

The Internet has made business more manageable. You can buy or sell anything you like in seconds and pay with Bitcoin or Ethereum. Soon, you can leverage advantages when international transactions are made with these cryptocurrencies. 

4. Corporate Treasury Management 

Companies could establish reserve accounts denominated in stablecoins instead of suffering from bank decay and continual capital increases. However, there is always a need for small monetary expansion and stringent liquidity structures. When everyone borrows no-risk capital, it becomes different in that the intervention no longer requires the coverage of any new money units. 

5. Decentralized Finance (DeFi) for Business 

Moreover, several business organizations are also exploring the possibility of DeFi, as with it, the monthly interest gains are more than any other.

At TransFi, we support a number of industries and sectors. Are you a global company operating in Ethiopia or an Ethiopian business planning to expand globally? If you are looking for a reliable, compliant payment partner to do business with, TransFi is the right one for you, providing ease of stablecoin and crypto payments packaged with a whole lot of other resources for smooth finances for your business. 

The impact stablecoins and digital assets can have on the industries in Ethiopia  

The implication of digital transformation means real-time connectivity and the access to vast amounts of information coupled with massive processing powers allowing integration and synergies across different economic sectors. Following are examples on the impact of digital transformation on financial inclusion, retailing, healthcare, agriculture, and manufacturing. Technological innovation and digital transformation have the potential to transform businesses regardless of industry, size, or geographical location. It can also contribute to economic growth, job creation, human capital development, and poverty and inequality reduction. Therefore, as the The pace of change accelerates, and both policymakers and enterprise owners need to constantly innovate, adjust, be dynamic, and project future scenarios, trends, and business models to remain relevant, competitive, and agile in a rapidly changing economic environment.

Technology innovation is facilitating access to more markets irrespective of geographical locations and fostering opportunities through new digital business models, including contributing to GVCs through leveraging innovation and human capital talents, accelerating the development of new products and services, enabling new ways of remote working, and availing a broad portfolio of opportunities for a diversified and inclusive workforce, including women and youth. With a proper, well-thought, and implemented acceleration of digital transformation, Ethiopia could be better positioned to face the ongoing challenges as well as face future ones. The enterprises that will invest wisely in their digital capabilities will eventually emerge in the business landscape much stronger while benefiting from Ethiopia’s large and growing market pending a conducive business environment.

Conclusion 

‘Cryptocurrencies can have a positive effect by acting as a disciplining device to central banks. Currency competition can succeed in calming inflation and preventing the sort of manipulation of interest rates and prices to which governments have historically been prone.’

African countries are no strangers to the use of digital solutions for money transfers, nor to the rapid implementation of such technologies. It is often said that the pervasiveness of mobile telecommunication usage in Africa, enabled the continent to leapfrog many first-world countries. There is already an abundance of local mobile and e-payment platforms that have seized this as an opportunity to develop innovative ways to reduce the friction associated with transferring money across the continent. An example is Transfi, which has been used widely for crypto and digital asset transactions. The platform allows customers to send and receive money via digital assets, various currencies, cryptos, etc. 

Foreign remittance remains a primary source of income for many African communities

and households, with countries like Lesotho purportedly attributing almost a third of their GDP to remittances from abroad. These, amongst many other factors, create the ideal environment for new ways of moving value, and present many of the challenges that distributed ledger solutions aim to solve. This also presents the potential for greater socio-economic inclusiveness, such as through enhanced financial security. 

Also read: Stablecoin Payments in AI-Native Economies: How Bots Will Transact with USDC

Frequently asked questions (FAQs)

1. Is it legal to use stablecoins in business transactions? 

Yes, stablecoins are legal in the majority of the countries of the world, but it is necessary to check the laws and regulations of the local government before getting started. In Ethiopia, the adoption is gradual but stablecoins are widely legally accepted for exchange and transactions.  

2. Which stablecoin is the most viable for businesses? 

USDT and USDC are still, by the majority, the most popular stablecoins, which are famous for their stability and liquidity. 

3. What are the benefits of using stablecoins in cross-border payments and remittances? 

The adoption of stablecoins as a means of payment, instead of traditional bank transactions, not only eliminates the role of the intermediary banks but also cuts back the cost of the transaction and final settlement times at very low-cost rates.

4. What do I do to adopt stablecoins in my corporation in Ethiopia? 

You can apply stablecoins as part of your business by having a suitable wallet, selecting a payment gateway such as TransFi, and educating employees and customers about their usage methods.

5. Why Are Global Businesses Turning to Stablecoins?

Overall, stablecoins have established themselves as growing and significant components of the global payment infrastructure, with expanding usage across transaction types and regions, pointing to their growing centrality in the international economic system.