The Myths and Realities of Stablecoins: A Field Guide from 20 African Countries

Africa is not a single market, and stablecoin development requires a delicate balance of policy preferences and political risk across 54 different markets. Entrepreneurs must understand local regulations, establish contacts, and prioritize risk control in order to successfully land. This article is based on an article by Adeola Adedewe, compiled by Mars Finance and compiled and written by Foresight News. (Synopsis: Three stages of stablecoin evolution: When decentralization is abandoned, what do you get when you enter Wall Street? Africa is not a single market, but is made up of 54 markets, with different regulators, different central bank strategies, and different political realities. The quickest way to frustrate yourself is to open with a PPT that says "Africa" as if it were a country, and then market a cookie-cutter stablecoin story. The Kredete team has just concluded a visit to 20 countries, talking to more than a hundred bankers, regulators and policymakers. This is a factual summary of the actual situation: what are the myths, what are the realities, and what is needed to achieve stablecoins. Takeaway: Stablecoins in Africa strike a delicate balance between policy preferences and political risk. On some occasions, it was seen as a pilot project, a green light all the way. In other areas, you can only be forced to quit without permission. Only a few countries currently have operational (VASP) licensing systems for virtual asset service providers. There are still several countries that are still in the sandbox testing/draft bill stage. Don't confuse advisory documents with licenses. Banks act when relationships, regulatory safeguards, and risk narratives align, not because you posted a LinkedIn post about "Africa Business Launch." The fastest credit test: Can your bank counterparty submit your proposal to the central bank and get a quick "no objection" response? If you can't, you're doing useless work. Myths and Reality (from real cases) Myth 1: "Africa needs our stablecoins." Reality: Africa needs regulated forex trading channels, predictable settlements, and strict KYC/AML processes. In some areas, tokenized deposits issued by banks are superior to public chain stablecoins at the institutional level. In other areas, fiat settlement APIs with proper reporting capabilities are superior to any tokenization scheme. Users want money that can be circulated and cleared, not white papers. Myth 2: "There are already ten VASP licenses on the continent: so hurry up." Reality: Noise on the web conflates draft laws, sandboxes, and official licenses. In fact, very few regulatory regimes are actually fully effective and actually licensed, and these licenses are accompanied by ongoing regulation. Announcements on LinkedIn do not equate to regulatory authorization. Myth 3: "African banks are eager to partner with global cryptocurrency startups." Reality: Africa's banks are rushing to keep their licenses. Leadership's considerations: Will this get us a warning letter from the central bank? Do our correspondent banks ask tough questions? Will this undermine forex regulation? If your answer is "not yet," they won't take action, no matter how many "daily active users" slides you show. Myth 4: "We can control Africa remotely from a joint office in Miami, Tel Aviv or São Paulo." Reality: It's a relational market. If you don't have a local supporter who can take your team to meet the director, or at least the right department head, you'll spend years in "about to start" status. Locals know who signs, who really makes decisions, and which week not to call, or you fly in to build relationships personally. North Africa: Where Monetary Regulations and the Cryptocurrency Boom Converge North Africa is a great example of how social media rhetoric is so different from street reality. Dinars, dirhams and pounds are all tightly regulated currencies. These countries impose strict foreign exchange controls. This means that unauthorized money movements, offshore accounts, or cryptocurrency transactions at the retail level can quickly violate currency laws. Here's what happens in practice: The bank's risk committee treats unauthorized cryptocurrency inflows as foreign exchange drainage. Even if you're promoting "just stablecoins," the legal basis is usually forex violations, not cryptocurrency-specific regulations. Law enforcement is not on paper. If your actions are found to be a violation of foreign exchange controls, penalties may include fines and imprisonment. This is the grim reality behind the "cryptocurrency adoption rate" chart. In addition, there are many regulatory trends and debates, including discussions about "sandboxes" and recognition of the existence of digital asset trading, but this does not mean that you can do whatever you want. The path to compliance activities is through rules set by banks, authorized intermediaries and central banks. In summary: in jurisdictions with strict exchange controls, your "stablecoin growth cycle" may look like a model for circumventing currency controls. Don't go to the party with a PPT that ignores this. The law actually enforced shall prevail. Regulatory Overview (Field Experience) The name of the specific company will not be mentioned here. It describes the dynamics and operational realities that have been experienced or validated in the meeting. The law is evolving; Regulators are also changing. But this provides a practical mental model for founders and product teams. "Operational VASP regime is in effect" In these countries, it is virtually possible to apply, obtain and be regulated by a dedicated virtual asset regime (or functionally equivalent licensing pathway). Banks, auditors and compliance teams can endorse accordingly. South Africa: Crypto assets are regulated as financial products. The licensing system is in force. Banks and market infrastructures are being coordinated. Significant progress has been seen in the policy dialogue, and the regulatory capacity is real. Mauritius: An established and well-versed offshore business regulator. The VASP license is real and the threshold for compliance is high. If you say, "We got a license here," that really means a lot to the bank. Seychelles: Although the law was relatively late, a practical licensing framework is in place today. Don't confuse the country's forex trading legacy with the current state of compliance: its regulatory regime is maturing rapidly. Namibia: A specific virtual asset law has been introduced. Even if secondary regulations are still being developed, this provides a legal basis for banks and law firms. Botswana: relevant legislation exists; Conservative but clear. For operators willing to operate in compliance, there is a practical development path. Grey area, but advancing: Nigeria: The country's central bank has re-allowed banks to provide services to virtual asset service providers (VASP) under clear rules, while securities regulators are building a more comprehensive framework. In practice, it is possible to reach an agreement with a suitable counterparty, but the operator needs to strictly control the scope of risk. "Drafts, sandboxes and signals" Kenya / Rwanda / Ghana: Formal draft policies, sandboxes and consultation papers are available. These are not licenses. But if you're looking to pilot with banks under the supervision of regulators, that's where collaboration with stakeholders comes in. Treat this stage like a bid: prepare the relevant documents, anti-money laundering manual, and emergency response plan. "Forex first, everything else second" North Africa and parts of the West/Central Africa corridor: Here, currency regulations are king. Your best bet is a bank-led tokenization pilot, fiat settlement with bank-level reporting, or a payment institution in a rigorous...