Africa’s Stablecoin Paradox?

Journal article

The economic literature has extensively examined the real and hypothetical effects of private digital currencies on macroeconomic conditions. However, the political implications of digital currencies are still being understood, and across Africa digital currencies are subject to heightened adoption and increased scholarly attention. In Nigeria, South Africa, Ghana, and Kenya, individuals and organisations are increasingly using stablecoins (tokenised assets pegged 1:1 to the US dollar) in daily economic life. If the trend continues, it could lead to a situation in which widespread adoption may erode the foundations of national monetary sovereignty. As understood within this essay, monetary sovereignty refers to a state’s legally recognised authority to regulate its monetary and financial system, historically grounded in the right to issue and control its currency. Crucially, sovereign monetary authority is only as effective as the trust placed in the state’s fiscal and monetary institutions. This essay proceeds from the premise that digital currencies pose a challenge to monetary sovereignty and examines the resulting tension from a geoeconomic perspective. The same features that make stablecoins attractive to individuals can, at scale, weaken the institutional arrangements that sustain domestic economic life, while simultaneously reproducing existing global monetary hierarchies. The digital currency paradox is therefore structural at both the domestic and international levels, arising where less centralised, and politically ambitious financial systems intersect with domestic monetary institutions that depend on control over the national unit of account.

Authors: Iluobe, O

• Publication status: Published
• Peer review status: Peer reviewed
• Host title: A Geoeconomic Global South
• Journal: St. Antony’s International Review
• Volume: 21
• Issue: 1
• Publication date: 2026-06-14
• DOI: 10.82556/stair.v21i1.609
• Language: English