By 
By Osasome C.O
Konga CEO Calls for Stablecoin Adoption, Regulators Flag Systemic Risks
The Chief Executive Officer of Konga Group, Prince Ekeh, has renewed calls for wider adoption of stablecoins to accelerate cross-border trade and reduce payment friction across Africa.
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In a statement, Ekeh argued that stablecoins and other emerging payment technologies could help African businesses overcome long-standing transaction bottlenecks, improve access to liquidity, and enable seamless commercial activities across multiple markets.
However, while private-sector interest is growing rapidly, financial regulators remain deliberately cautious, citing macroeconomic, monetary, and consumer protection risks tied to large-scale stablecoin adoption.
What Stablecoins Offer African Businesses
Stablecoins are cryptocurrencies designed to maintain a stable value by being pegged to assets such as fiat currencies, commodities, or baskets of assets—most commonly the U.S. dollar. By combining the speed and borderless nature of blockchain with price stability, stablecoins have emerged as practical tools for:
- Cross-border payments and remittances
- Faster settlement of international trade transactions
- Liquidity management in volatile currency environments
Ekeh noted that despite Africa’s fintech progress, businesses still struggle with inefficient cross-border payment systems.
“Nigeria has gone very far in online transactions and fintech innovation. The progress made by institutions such as NIBSS and the broader fintech ecosystem deserves commendation,” he said, adding that business adoption continues to lag behind consumer usage.
Why Regulators Are Proceeding With Caution
Despite their utility, stablecoins raise several red flags for central banks and financial regulators across Africa.
1. Threat to Monetary Sovereignty
Because most stablecoins are pegged to the U.S. dollar, large-scale adoption could accelerate digital dollarization, weakening demand for local currencies such as the naira. Regulators fear this could:
- Undermine monetary policy effectiveness
- Encourage capital flight
- Reduce central bank control over money supply
2. Regulatory and Policy Uncertainty
Stablecoin markets have grown faster than regulatory frameworks. In Nigeria, past restrictions on crypto trading and peer-to-peer platforms illustrate regulators’ concern about systemic risk and financial stability.
Frequent policy shifts make it difficult for banks and large enterprises to integrate stablecoins confidently into their operations.
3. Consumer Protection, Trust, and Cyber Risks
The crypto sector has been plagued by wallet hacks, scams, and fraudulent schemes. Regulators worry that:
- Low financial literacy could expose consumers to losses
- Weak dispute-resolution mechanisms could harm trust
- Unsophisticated users may not fully understand private key risks
4. Infrastructure and Inclusion Gaps
Stablecoin usage depends on reliable internet access, smartphones, and digital literacy—still lacking in many rural and underserved areas across Nigeria and Africa. Regulators caution that premature adoption could widen financial exclusion, not reduce it.
5. Fiat On/Off-Ramping Bottlenecks
Converting between local currency and stablecoins requires cooperation with traditional banks. Account freezes, compliance costs, and KYC constraints continue to create friction, limiting seamless adoption at scale.
6. Dependence on Foreign-Issued Stablecoins
Until recently, most stablecoins used in Africa were issued offshore. Regulators are wary of:
- Exposure to foreign reserve management failures
- Limited oversight of external issuers
- Systemic risk if a major stablecoin collapses
Regulators Shift From Bans to Guardrails
Acknowledging that stablecoins are unlikely to disappear, regulators are evolving their approach. In Nigeria, both the Central Bank of Nigeria and the Securities and Exchange Commission have moved from outright restrictions toward structured oversight.
Key initiatives include:
- Regulatory sandboxes for digital asset testing
- Licensing and compliance frameworks for fintechs
- Support for compliant, locally backed alternatives such as the cNGN (Compliant Naira)
These measures aim to balance innovation with monetary stability and consumer protection.
Business Perspective: Innovation With Responsibility
Ekeh acknowledged that digital trust remains a major hurdle but expressed confidence in regulatory progress.
“People often become nervous when they hear the word crypto. However, every technology has two sides. Artificial Intelligence creates enormous value, yet it can also be misused. The same principle applies to crypto,” he said.
Drawing from Konga’s experience, Ekeh explained that investments in infrastructure and responsible use of emerging technologies have helped improve efficiency and unlock growth opportunities.
The Road Ahead for Africa’s Digital Trade
Stablecoin adoption in Nigeria and across Africa is being driven largely by the need to hedge against inflation and currency volatility. Yet regulators insist that unchecked growth could pose systemic risks.
Unlocking Africa’s full commerce potential, analysts say, will depend on:
- Clear and consistent regulation
- Strong digital and energy infrastructure
- Greater business confidence in compliant innovation
As Ekeh noted, the continent’s next phase of growth will be shaped not just by technology, but by how responsibly it is deployed to enable trade without borders.
