Stablecoins were meant to make cross-border payments faster, cheaper, and more accessible. But for many African users, the final step - converting digital dollars into local currency - is proving far more expensive than expected. New data shows that while the median conversion cost across Africa is around 3%, some countries are facing dramatically higher fees.
The most striking example comes from Botswana, where the median cost of converting stablecoins into local currency reached 19.4% in January 2026. That figure was derived from nearly 94,000 pricing checks across 66 African currency corridors - making it the highest rate recorded in the study.
The Real Bottleneck: Off-Ramps, Not Blockchain
According to research from payments firm Borderless, the core blockchain infrastructure works as intended. Stablecoins can move across borders almost instantly and at negligible cost. The problem arises at the “off-ramp” - when users attempt to convert digital assets into spendable local cash.
Across Africa, the average conversion fee stands at 299 basis points (roughly 3%). In comparison, Latin America averages about 1.3%, while parts of Asia see rates as low as 0.07%. The disparity highlights a structural issue rather than a technological one.
In Democratic Republic of the Congo, conversion costs exceeded 13%, placing it among the most expensive markets. Analysts point to limited competition as the primary driver. In corridors dominated by just one or two providers, pricing power remains unchecked.
Competition Makes the Difference
The contrast becomes clear when looking at South Africa, where multiple providers compete in the digital currency space. There, conversion costs hovered around 1.5% in early 2026 - significantly lower than in monopoly-like markets.
The pattern is consistent: more competition equals lower fees. Where markets remain concentrated, users shoulder the burden.
This imbalance persists despite Africa’s growing digital economy. Mobile technologies and services generated an estimated $220 billion in economic value in 2024, yet access to efficient digital currency conversion remains uneven.
The “TradFi Premium” Problem
Researchers introduced a metric called the “TradFi Premium” to measure the gap between stablecoin exchange rates and traditional bank foreign exchange rates. Globally, the difference averages just 0.05%. In Africa, however, the premium jumps to 1.2% (119 basis points).
That means African users are paying a meaningful surcharge simply to access digital dollars - a contradiction to stablecoins’ promise of efficiency.
At the World Economic Forum in Davos on January 24, economist Vera Songwe highlighted how digital currencies can reduce remittance fees, which often exceed 6% through traditional channels. While that claim holds in competitive markets, the new data shows the benefit disappears where competition is weak.
In some cases, stablecoin conversion now costs more than conventional wire transfers, reversing the expected cost advantage.
Regulation and Market Access Matter
Experts argue that the solution is not more technology - it is market access and regulatory clarity. In countries where legal frameworks for digital assets remain ambiguous, new providers hesitate to enter. Without fresh entrants, prices remain elevated.
Governments that establish clear rules for stablecoin providers tend to see healthier competition and lower costs. Conversely, regulatory uncertainty reinforces high-fee monopolies.
The blockchain itself functions as designed. Cross-border settlement is nearly frictionless. But until markets like Botswana and Congo attract more providers - and regulators create stable, transparent frameworks - many African users will continue paying far more than their global counterparts.
The digital money revolution has arrived. For parts of Africa, however, its benefits remain unevenly distributed.
