Onafriq, a major African payments network, has partnered with US-based fintech Conduit to use stablecoins for settling cross-border transactions across the continent, the companies announced on Tuesday.

The collaboration will allow Onafriq to leverage Conduit’s infrastructure to convert local currency payments into US dollar-pegged stablecoins for instant settlement, before converting back into the destination currency for payout. The service is designed to reduce the cost, time, and complexity associated with traditional correspondent banking for intra-African payments.

Partnership Details and Market Context

Onafriq, formerly known as MFS Africa, operates one of Africa’s largest digital payments networks, connecting over 400 million mobile money wallets and bank accounts across more than 40 African countries. Founded in 2009, the company facilitates cross-border payments and airtime top-ups, and has partnerships with major global firms like Visa and PayPal. Its network is particularly strong in East and West Africa.

Conduit, founded in 2021, provides a backend infrastructure layer that enables traditional financial institutions and fintechs to integrate stablecoins into their payment flows. The company focuses on facilitating cross-border transactions using digital assets pegged to fiat currencies like the US dollar.

The partnership is initially focused on corridors within Africa, with plans to expand to routes connecting Africa to the rest of the world. The move is part of a broader industry trend where African fintechs are exploring stablecoins to bypass the high costs and delays of legacy cross-border payment systems, which often rely on correspondent banks holding nostro accounts in foreign currencies.

Africa's Stablecoin and Payments Landscape

The use of stablecoins for cross-border settlement is gaining traction in Africa, driven by the continent’s high volume of remittances and intra-regional trade under the African Continental Free Trade Area (AfCFTA). Traditional remittance corridors into Sub-Saharan Africa are among the most expensive globally, with average costs exceeding 8% of the transfer amount, according to World Bank data.

Several African central banks, including Nigeria’s and Ghana’s, are developing or piloting their own central bank digital currencies (CBDCs). However, private-sector stablecoins, typically pegged to the US dollar, offer an alternative that mitigates local currency volatility for merchants and businesses engaged in cross-border trade.

Onafriq’s move follows similar explorations by other African payments giants. Flutterwave, a Nigerian payments unicorn, recently integrated USDC stablecoin payments for businesses. The continent’s largest mobile money operator, M-Pesa, operated by Kenya’s Safaricom, has also been involved in blockchain-based cross-border payment pilots.

Uganda’s payments sector saw related development, as Payaza, a Nigerian digital payments platform, secured a Payment Systems Operator (PSO) license from the Bank of Uganda. This license will allow Payaza to facilitate domestic and cross-border payments within the country, which has a population of over 48 million and a mobile money penetration rate exceeding 70%.

Regulatory Considerations and Future Outlook

The expansion of stablecoin-based services in Africa faces a complex regulatory environment. While some jurisdictions like South Africa have established licensing frameworks for crypto asset service providers, others maintain cautious or restrictive stances. Nigeria’s Central Bank has previously barred local banks from servicing crypto exchanges, though it has since introduced guidelines for banks to support regulated virtual asset service providers.

Success for partnerships like Onafriq and Conduit will depend on navigating these regulations and ensuring compliance with anti-money laundering and know-your-customer rules. The appeal for businesses lies in potential settlement times reduced from days to minutes and lower foreign exchange margins.

The partnership represents a significant test case for whether stablecoin infrastructure can achieve scale in Africa’s fragmented but digitally advancing payments market, where mobile money remains the dominant digital payment channel for consumers.