Circle and Onafriq launched a blockchain-powered USDC settlement pilot across 40 African nations, aiming to slash remittance fees by up to 80% through mobile money integrations like M-Pesa and Airtel.
Circle announced on 15 November 2023 a partnership with pan-African payments giant Onafriq to test USDC settlements across 500+ mobile wallets, targeting the continent’s $100B remittance market through streamlined blockchain corridors.
Blockchain Bridges for Mobile Money Networks
Circle’s USD Coin (USDC) will settle transactions between Onafriq’s 200 million connected bank accounts and mobile money platforms including M-Pesa (Kenya), MTN Mobile Money (West Africa), and Airtel Money (East Africa). The pilot bypasses traditional correspondent banking by using blockchain rails for real-time USDC conversions.
Regulatory Tailwinds in Key Markets
The initiative follows Nigeria’s Central Bank lifting its crypto transaction ban on 23 December 2022, enabling licensed operators to deploy dollar-pegged stablecoins. Onafriq CEO Dare Okoudjou stated: ‘This solves the liquidity fragmentation that costs African migrants $5 billion annually in excessive FX spreads.’
Cost Arbitrage Against SWIFT
World Bank October 2023 data shows Sub-Saharan Africa pays 7.8% average remittance fees versus 4.3% globally. Circle’s Jeremy Allaire claims blockchain settlements could reduce costs to 1.5-2% by eliminating multiple currency hops – a 74% saving on sending $200 to Nigeria from Europe.
Visa’s Infrastructure Play
The partnership builds on Visa’s September 2023 integration of USDC payouts across 145 countries. Onafriq processes $20B+ annually through its network of 500 million mobile wallets, per Q3 2023 investor reports.
Historical Context: Mobile Money’s Evolution
Africa’s mobile payment revolution began in 2007 with M-Pesa in Kenya, which grew to 51 million active users by 2023. These systems laid groundwork for blockchain adoption by familiarizing users with digital transactions outside traditional banking.
Currency Volatility Risks
While USDC’s dollar peg offers stability, analysts note challenges in markets like Nigeria where the naira fell 40% against USD in 2023. Liquidity pools must scale to prevent slippage during high-volume transactions, requiring coordination between Circle and local exchanges.
