Africa’s next phase of stablecoin adoption could be driven by digital tokens pegged to local currencies rather than the U.S. dollar, according to a new report by Standard Chartered and digital asset firm Zodia Markets.

The report says local-currency stablecoins could lower payment costs, improve cross-border trade and help businesses manage liquidity more efficiently. Although the global stablecoin market has grown to more than $300 billion, more than 98% of its value remains denominated in U.S. dollars, leaving African currencies largely absent from the digital payments ecosystem.

Rochelle McCauley, Managing Director and Head of Banks, Broker Dealers, and Fintech for Africa at Standard Chartered, said stablecoins are increasingly being viewed as payment infrastructure, not only as tools for crypto trading.

According to McCauley, local-currency stablecoins could reduce friction in cross-border payments, lower remittance costs, support regional trade and allow companies to move liquidity across markets more efficiently. She also said they could enable transactions outside traditional banking hours.

The report identifies Ghana, Rwanda, Namibia, Senegal and Côte d’Ivoire as among the strongest candidates for local-currency stablecoins. Its ranking suggests the opportunity is not simply about crypto adoption, but about where digital settlement could fill gaps in existing payment rails while still being tied to domestic currencies.

South Africa ranks lower in the report, largely because it already has a well-developed banking sector, deep capital markets and advanced payment infrastructure.

Standard Chartered says local-currency stablecoins could complement initiatives such as the Pan-African Payment and Settlement System (PAPSS). The report argues that these tokens could allow businesses to settle transactions closer to the currencies they actually use, reducing reliance on correspondent banks and multiple foreign-exchange conversions.

However, the report says widespread adoption will depend on clear regulation covering reserve backing, transparency, redemption rights, anti-money laundering controls, cybersecurity and consumer protection. Those requirements are central because local-currency stablecoins would need users, banks, payment companies and regulators to trust that tokens can be redeemed reliably and that reserves are properly managed.

McCauley also warned that if local-currency stablecoins are not developed, U.S. dollar-backed stablecoins could become Africa’s default digital payment layer. She said that could accelerate dollarization, weaken monetary policy and limit the development of domestic financial markets.