As the world becomes increasingly digitised, how we interact with money is fundamentally shifting. Few regions stand to benefit more from this financial evolution than Africa, where access to traditional banking services remains limited for much of the population.

Stablecoins—cryptocurrencies pegged to traditional fiat currencies like the U.S. dollar—and their crypto cousins represent a potential gateway for Africans to access the burgeoning world of decentralised finance (DeFi) in a way that overcomes many barriers inherent with legacy financial systems.

The State of Crypto in Africa Today

While still in its nascent stages, cryptocurrency adoption is already taking root across the African continent. Recent survey data indicates there are now over 24 million crypto owners in Africa, with the top markets being Kenya, South Africa, Nigeria and Morocco.

The key drivers? Largely remittance payments, inflation hedging, and speculative investment - all use cases that stem from the core properties that make blockchain-based currencies so transformative.

"Unlike traditional digital money tied to banks and other intermediaries, crypto is globally accessible through just an internet connection and functions 24/7/365 without any third-party oversight," explained Nelson Elemi, founder of remittance startup service TrendX.

For regions like sub-Saharan Africa where over 60% of the population is unbanked, censorship-resistant peer-to-peer digital cash represents a profound advancement in financial freedom and inclusion.

These benefits are amplified when it comes to stablecoins, which combine the stability and familiarity of fiat currencies with the borderless, instantaneous transfer capabilities of cryptocurrency rails.

"East Africa in particular has experienced rapid stablecoin adoption due to its de facto 'dollarisation' and significant volumes of cross-border remittance flows," noted Ernest Paul, a Blockchain Lead at Blockfund, a local crypto asset research company..

"There's already over $100 million in USDT on Ethereum addresses tied to Africa," he added. "These digital dollars provide significantly more utility and spur crypto usage in areas lacking financial infrastructure and stable local currencies."

Essentially, stablecoins act as a seamless on-ramp to crypto that could spark self-perpetuating adoption loops across Africa's mobile-first, remittance-driven economies.

The Stablecoin Gateway to Bitcoin

However, the real generational wealth opportunity may lie in using stablecoins as an educational bridge to Bitcoin and other highly-appreciated crypto assets over time.

Unlike fiat-backed tokens, Bitcoin operates as the internet's first truly scarce digital money by design. With a strictly limited supply capped at 21 million coins, Bitcoin acts as a hedge against inflation and currency devaluation - a particularly valuable trait for economies plagued by high price instability.

According to data from Chainalysis, citizens in the developing world are growing to adopt Bitcoin as a reserve asset and flight capital—and this trend shows no signs of abating.

A recent report from crypto investment firm CoinShares posits that growing stablecoin usage could serve as a powerful catalyst for further Bitcoin adoption across Africa and other emerging markets.

"By placing Bitcoin in direct competition with fiat currencies and stablecoins, it is neatly provided the opportunity to capture new audiences who can see its superior long-term store of value properties," stated the CoinShares report.

Chainalysis's research supports this idea, estimating that over 50% of crypto funds sent by sub-Saharan Africa over the last year were Bitcoin and stablecoins.

With an increasing number of African crypto exchanges like Yellow Card, Luno, and Quidax now offering fiat on and off-ramps and multicurrency wallets that hold both stablecoins and Bitcoin, users effectively have front-row seats to an open arena where all forms of money compete for their liquidity.

"This type of user experience offers controlled testing of users' monetary preferences and behaviour," noted the CoinShares team, which believes that should The Gresham Law hold, more stablecoins and local currency would be used as transactional money, with Bitcoin as a store of value."

Banking the Unbanked with DeFi

But perhaps the most powerful use case that stablecoins unlock is the ability to participate in decentralised finance (DeFi) - the ecosystem of globally accessible lending, borrowing, trading and other financial products built on blockchain networks.

Already, regions like Nigeria are among the global leaders in crypto adoption, attracting over $60 billion in remittances over the past year according to Chainalysis data. These decentralized protocols provide unparalleled access to interest-earning, borrowing against collateral, and more - all by just holding supported crypto assets like stablecoins in user-controlled digital wallets.

For an underbanked population that has traditionally been shut out of wealth-building financial primitives, stablecoins represent a transformative rail for participating in the future of internet-native finance. And the more this ecosystem develops, the stronger the gravity will become in pulling users deeper into the world of cryptocurrency beyond just holding stablecoins.

When considering stablecoins' advantages as a payments and remittance rail, inflation hedge, and access point to DeFi - their potential to bridge to Bitcoin adoption in Africa is equally immense.