Stablecoin Myths and Realities: A Field Guide from 20 African Countries

By Adeola Adedewe, Founder and CEO of Kredete; Translated by Felix, PANews. Africa isn't a single market, but rather 54, with diverse regulators, central bank strategies, and political realities. The quickest way to frustrate yourself is to open with a slide that says "Africa," as if it were a single country, and then sell a cookie-cutter stablecoin story. The Kredete team just concluded a 20-country visit, speaking with over a hundred bankers, regulators, and policymakers. This is a candid summary of the realities on the ground—what's wrong, what's true, and what's needed to make stablecoins a reality. Key Points: Stablecoins in Africa sit on a delicate balance between policy preferences and political risks. In some cases, it's treated as a pilot program and given the green light. In other areas, the mere appearance of unlicensed operations can force you out. Currently, only a handful of countries have operational licensing regimes for virtual asset service providers (VASPs). Several others are still in the sandbox testing/draft bill stage. Don't confuse consultation documents with licenses. Banks will act when the relationship, regulatory safeguards, and risk narrative align, not because you posted a LinkedIn post about "African business launch." The quickest credibility check: Can your bank counterparty submit your proposal to the central bank and quickly receive a "no objection" response? If not, you're doing nothing. Myths and Realities (Based on Real Case Studies) Myth 1: “Africa needs our stablecoins.” Reality: Africa needs regulated foreign exchange trading channels, predictable settlement, and rigorous KYC/AML processes. In some areas, tokenized bank-issued deposits are superior to public blockchain stablecoins at the institutional level. In other areas, fiat settlement APIs with proper reporting capabilities are superior to any tokenized solution. Users want funds that can be moved and cleared, not white papers. Myth 2: “Ten VASP licenses are already live on the continent—so hurry up.” Reality: Online noise confuses draft laws, sandboxes, and formal licenses. In reality, few regulatory regimes have truly taken full effect and issued licenses—and those licenses are accompanied by ongoing oversight. Announcements on LinkedIn do not equate to regulatory authorization. Myth 3: “African banks are eager to work with global cryptocurrency startups.” Reality: African banks are eager to keep their licenses. Leadership considerations: Will this get us a warning letter from the central bank? Will our correspondent banks ask tough questions? Will this undermine foreign exchange regulation? If your answer is “not yet,” they won’t act—no matter how many “daily active users” slides you show. Myth 4: “We can manage Africa remotely from our co-working spaces in Miami, Tel Aviv, or São Paulo.” Reality: This is a relationship-based market. If you don’t have a local champion who can take your team to the director, or at least the right department head, you’ll spend years in “about-to-launch” mode. Locals know who signs off, who actually makes the decisions, and which weeks not to call—or you can fly over and build relationships in person. North Africa: Where Currency Regulation and the Cryptocurrency Craze Intersect North Africa is a prime example of how social media narratives diverge sharply from street reality. The dinar, dirham, and pound are all tightly controlled currencies. These countries enforce strict exchange controls. This means that unauthorized fund flows, offshore accounts, or retail cryptocurrency transactions can quickly run afoul of currency laws. Here's what happens in practice: Banks' risk committees treat unauthorized cryptocurrency inflows as foreign exchange outflows. Even if you're promoting "just a stablecoin," the legal basis for this is often a foreign exchange violation, not cryptocurrency-specific regulations. Enforcement isn't a paper exercise. If your actions are deemed to violate exchange controls, penalties can include fines and imprisonment. This is the harsh reality behind the "cryptocurrency adoption" chart. Furthermore, regulatory developments and debates continue to emerge, including discussions about "sandboxes" and the recognition of the existence of digital asset trading. However, this doesn't mean free rein. Compliance activities must proceed through the rules set by banks, authorized intermediaries, and central banks. Bottom line: In jurisdictions with strict exchange controls, your "stablecoin growth cycle" may appear to be a model for circumventing currency controls. Don't show up with a PowerPoint presentation that ignores this. The actual laws in force should guide you. Regulatory Overview (On-the-ground Experience) This section will not mention specific companies by name. It describes the dynamics and operational realities experienced or validated in meetings. Laws evolve; regulators change. However, this provides a useful mental model for founders and product teams. "Operational VASP regimes are in effect" In these countries, it's practical to apply for, obtain, and be regulated under a dedicated virtual asset regime (or a functionally equivalent licensing pathway). Banks, auditors, and compliance teams can endorse this. South Africa: Crypto assets are regulated as financial products. The licensing regime is in effect. Banks and market infrastructures are coordinating. We're seeing significant progress in policy dialogue, and the regulatory capacity is real. Mauritius: A mature and well-versed regulator with offshore expertise. VASP licenses are real, and the compliance threshold is high. If you can say, "We got a license here," it really means a lot to banks. Seychelles: While the law was introduced relatively late, it now has a workable licensing framework. Don't confuse the country's legacy of foreign exchange trading with its current compliance status—its regulatory regime is maturing rapidly. Namibia: A dedicated virtual asset law exists. This provides a legal basis for banks and law firms, even as secondary regulation is still under development. Botswana: Legislation exists; the approach is conservative but clear. A viable path forward exists for operators willing to comply. Gray area, but progress is underway: Nigeria: The central bank has re-enabling banks to serve virtual asset service providers (VASPs) under clear rules, while the securities regulator is developing a more comprehensive framework. In practice, agreements can be reached with suitable counterparties, but operators need to strictly manage risk profiles.

"Drafts, Sandboxes, and Signals"

• Kenya/Rwanda/Ghana: Formal draft policies, sandboxes, and consultation documents exist. These are not licenses. However, if you wish to conduct pilots with banks under regulatory oversight, this is where collaboration with stakeholders comes in. Treat this stage like a bid: prepare relevant documentation, an anti-money laundering manual, and a contingency plan.

"FX first, everything else second"

• North Africa and parts of the West/Central African corridor: Here, currency regulation is king. Your best bets are bank-led tokenization pilots, fiat settlement with bank-level reporting, or partnerships with payment institutions in a strictly regulated environment. Banks don't buy tokens, they buy risk stories. When you walk into the offices of CEOs, group CFOs, and risk managers, what impresses them isn't the "stablecoins are the future" narrative. What impresses them is: 1. A regulatory-first architecture. Where do regulators fit into the data flow? What information can the project proactively report—volumes, counterparties, suspicious patterns? Can the bank submit a clear no-action letter to the central bank within 48 hours? If your documentation adds workload to the bank, you're not ready to be a partner. 2. Integrating FX Compliance and Sanctions Monitoring How do you prevent capital outflows and arbitrage? Where are your oracles, price feeds, and reconciliation controls located? What is your alerting strategy? 3. Consumer Harm and Reputational Risk Control If a journalist tests your product with $200, how do you prevent KYC circumvention? What are your policies for response times to bans, revocations, or fraud? Can the bank explain your user experience to the minister in a short period of time? 4. Liquidity and Settlement under CEO Oversight Who safeguards fiat currencies at the margins? Who maintains trust accounts? Who acts as the correspondent bank? What happens if an exchange counterparty freezes withdrawals on Friday night? How much will the bank lose if you fail? Banks are buying the assurance that "we won't go bankrupt working with you." Your rhetoric needs to be recast as a risk-minimizing narrative that ultimately achieves compliance throughput, not the other way around. Common Mistakes Non-African Entrepreneurs Make: "We spoke with a bank." Did you speak with your relationship manager? Or did you meet with the executives who can approve it? If your so-called "bank" contact can't convene a meeting with the CEO/CTO/CFO, then you haven't spoken with the bank. "We have connections." In Africa, "connections" isn't a Calendly link. It's someone who can deliver documents to the right department at the central bank. If your partner can't text the person who wrote the memo, you have a long way to go. "We're compliant in region X, so we can apply for a pass for region Y." This isn't the EU; there are no passports this time. Every path has been earned. "We can do this without local equity participation." In many markets, true alignment of interests means having local input—from governance to revenue sharing. Otherwise, you become a supplier, not a partner, and suppliers are replaceable. "Crypto licenses are everywhere these days." No, some are already in effect and serious; some are still in draft form; and some are just PR. Know the difference, and stop mistaking consultation PDFs for "licenses." An action guide for banks (the key to truly driving progress) Prepare a one-page document for the central bank. Purpose, flow of funds, customer journey, partner bank responsibilities, data retention, STR/SAR triggers, travel rule processing, and exit mechanisms. Keep it to one page.

  Initiate a small-scale pilot.

  Use a single channel, limited transaction volume, a restricted user base, and clear stop-loss conditions. Define key success metrics (fraud rates, dispute rates, complaint resolution time) for regulators, not just your growth team.

  Get reporting right from day one.

  Provide daily transaction volume and outlier reports to partner banks; weekly summaries for policymakers; and monthly compliance certifications with screenshots and signatures.

  Equip your product with audit tools.

  Build a regulatory view: Provide a downloadable CSV file containing KYC hashes, sanctions, transaction flags, and end-to-end timestamps. If a regulator asks for a sample of 50 transactions, you should be able to export it within five minutes.

  Communicate judiciously through back channels, and don't act rashly.

  You need reputable local partners who can quietly and credibly help you reach out to the right people. Self-promoting posts are harmful. Recommendations are what count.

  Understand the real FX landscape.

  In regions with strict FX controls, actual exchange rate differentials, liquidity windows, and settlement deadlines are more important than "on-chain fees." If you don't know when customs closes, you can't understand the corridors of funds.

  Stablecoins: Myth vs. Reality

  Myth: Retail stablecoins will "solve remittance problems across Africa" ​​by 2030.

  Reality: In regulated markets, retail cryptocurrency onramps are considered shadow FX. Once your fund flows resemble disguised currency transactions, you're within the law enforcement purview. Your best bets are bank-led pilot programs (tokenized deposits, controlled stablecoins for B2B settlements) or transparently priced fiat on-ramps. Myth: "Just give regulators more training and they'll approve." Reality: Regulators aren't waiting for webinars. They're managing inflation targets, monetary stability, and systemic risk. Education helps, but the key is demonstrating a compliant instrument that doesn't interfere with their policy objectives. Reality: When a stablecoin is designed as a bank-issued or bank-backed instrument with a clear redemption mechanism, audited reserves, and real-time regulatory visibility, it can become a compliance feature. In such an environment, the term "stablecoin" becomes more than just a name; it becomes a mechanism.

  Reality: In some sectors, stablecoins are the only currencies that can be transparently cleared 24/7—but only if your partners can legally hold, redeem, and report on them. Otherwise, you've just built a beautiful but unusable demo.

  Field Notes from 20 Countries

  Executives want specifics, not slogans. "Who holds the funds? Who's responsible for what? What scenarios could cause problems?" If your answers are vague, the meeting will politely end and nothing will happen.

  Competitor influence is real. As soon as you mention a competitor bank in the region, their interest will spike. "If they're concerned about this, we should at least listen." Use this strategically—but don't bluff. If you bluff, a subsequent call with that competitor will end your business process.

  A CEO in the room = action. This happens all the time. If the group CEO or actual decision-maker is present, you'll leave with a to-do list. If you only focus on "innovation" or "partnership," you'll leave empty-handed. Embassies and trade offices are often underestimated. They can't secure licenses, but they can open doors, demonstrate your sincerity, and reduce the risks of arranging travel and meetings. Use them effectively. Mobile payment channels can be either your best friend or your biggest compliance headache. In some countries, they're the fastest and most cost-effective "last mile"; in others, they present a regulatory tightrope due to issues like agent networks and leaked customer identification information. Your banking partner will be able to explain the specifics. Linguistic and legal nuances are crucial. "Approval," "no objection," "letter of comfort," "registration," and "license"—these terms are not synonymous. Be precise, or you'll appear unprofessional.

  Smart ways to verify claims about Africa (before you pitch)

  Is it a law, regulation, or just a news report?

  • The bank's legal team will read the law and signed regulations.

  If there is a system in place, has the license actually been issued?

  • A "draft framework" does not equal a "formal license."

  What does the central bank think about foreign exchange trading in the jurisdiction?

  • Closed currency? Convertibility restrictions? Reporting thresholds? If you can't explain these, you're not ready. If banks work with you, what are their reporting obligations? Do they have to submit weekly summaries? Real-time suspicious activity? Are you letting them avoid audits? What does “consumer harm” look like here? In some markets, a flood of complaints on social media can trigger policymaking. In others, a newspaper article can get you a call from a minister. Who are your local referrals? Which law firm, which former regulator, which respected practitioner will take your call? If the answer is, "We're compliant globally," you have no protection locally.

  Etiquette and Strategy: How to Meet with Bank Executives and Regulators (Successful Tips)

  Bring your business card. Old-school? Yes. And effective. Business cards get passed up the chain.

  Be on time. These are rigid cultural rules. If you're late, you lose your chance.

  Be courteous and build buy-in from the top. If your network can legitimately get the group CEO or board members into the meeting, do so. When the boss is involved, decisions are made faster.

  Take advantage of competitors' curiosity wisely. Mentioning the interests of competing banks can turn a coffee break into a working meeting. But only do this if the situation warrants it.

  Ask about preparing a plan for the central bank. Don't wait for someone to tell you. Submit a draft in the meeting room.

  Bring a list. Who completed what, when? Which pilot? What were the limitations? Follow up that day with a one-page summary.

  A message to African founders

  Tone down the "we're solving Africa's problems" narrative. Get out there, meet with bank operations teams, talk to regulators, and listen. The continent doesn't need a savior; it needs a partner who can coordinate policy, products, and politics. If you're serious, find the most connected and trusted person in Africa to sponsor you. If you can't find one, then this isn't your market—at least not yet.

  Also, please stop announcing "bank partnerships"; those are really just exploratory calls. You don't want to be the butt of everyone's jokes.

  Why is local capital important? One of the biggest advantages I saw during my visit: having Africa's largest venture capital firm on the equity table. The team has spent years building relationships, trust, and regulatory savvy that no presentation or telemarketing can replicate. The doors open differently in every meeting with them. The welcome is warmer, the conversations more candid, and trust is instantly established. This is where the real value lies: the team brings the technology, and they bring the policy and banking jargon. It's this combination that has transformed the team from "just another startup pitching crypto" into a trusted partner worthy of banks. Not to toot their own horn, but they've put in a lot of effort to facilitate these conversations. Combined with product execution, a potential unicorn is born. After visiting 20 countries and over 100 banks, I can confirm this: now is the time for African founders to build real-world products. This opportunity isn't "crypto for crypto's sake." It's about regulated cross-border value flows that respect currency regulations, consumer protections, and foreign exchange policies. If you're building, here's the ultimate checklist: Choose a channel and dominate it. Design a dashboard for your leader, not just your team's growth. Treat foreign exchange law as your first rule. Staff locally. Managers, compliance officers, and legal counsel who can access the appropriate offices without a calendar link.

• Treat your license like a living organism. If you want the benefits, you must accept the regulations.

Africa is about relationships, it is about details, and it is about rules. Respect all three, and you will create a product that lasts.