TL;DR
- Fintech company Flutterwave will enable stablecoin payments on its platform for businesses in 34 African countries this year.
- The agreement with Polygon Labs will allow for faster and cheaper transactions than current systems for cross-border payments.
- Nigeria recorded $50 billion in crypto transactions, seeking to avoid bureaucratic obstacles and the devaluation of the naira.
Flutterwave Inc., a Nigerian financial-technology company, intends to enable payments on its platform using stablecoins. The initiative seeks to offer an alternative to traditional payment providers, which often involve slower processing and higher costs. Flutterwave operates services in 34 African nations.
The Lagos-based firm will launch a new cross-border payment product for business customers later this year. It is partnering with Polygon Labs, a United States-based entity that develops software for more efficient digital transactions.
Olugbenga Agboola, Chief Executive Officer of Flutterwave, noted that stablecoins are seeing rapid expansion worldwide. He expressed the company’s aim to become the preferred payment option when businesses transact with African suppliers.
Stablecoins have gained wider use for commercial payments and transfers
This development followed the enactment of a US law in July that established rules for this specific cryptocurrency sector. In Nigeria, stablecoins appeal particularly to younger populations comfortable with digital tools.
Estimates from Nigeria’s Securities and Exchange Commission indicate that residents conducted $50 billion in cryptocurrency transactions over the 12 months ending June 2024. Many users seek to avoid administrative delays in cross-border payments, high local interest rates, and a naira that has lost substantial value against the dollar since 2023.
Agboola said stablecoin adoption for international payments could direct more financial activity into Africa. He described how the method leapfrogs existing systems, cutting transfer durations from several days to mere minutes. He projected that the shift might multiply payment volumes by a factor of ten compared to present figures.
