The Pan-African Stablecoin: Africa’s Best Shot at Financial Independence

I often write articles, park them in the name of doubt, and then something triggers me to jump on my laptop and publish them. This morning, it was an article on the FT about Tether piling up gold reserves as collateral for USDT. All these gold reserves are parked in Switzerland. Guess which continent also has a ton of Gold? Yep - Africa. 

This article is a sequel to my previous piece, which explores whether Africa needs its own Delaware. The core question remains: if Africa requires a unified financial infrastructure, shouldn’t it also have a stable currency for seamless trade?

A tweet by Steven Grin on the critical role of local stablecoins in global finance sparked my imagination. Before diving in, I encourage you to check out his thought-provoking thread here:

https://x.com/sgrin77/status/1890089584878551178

This article explores the history of African currencies, the significance of stablecoins, and how a Pan-African Stablecoin (PASC) could potentially transform the continent’s economy, along with a roadmap for implementation.

Africa’s Currency Problem: A Legacy of Dependency

For decades, Africa’s financial system has been shaped by external influences. The West African and Central African CFA francs remain pegged to the euro, and over 70% of intra-African trade transactions are settled in USD. This dependence drains foreign reserves, heightens inflation risks, and makes African economies vulnerable to external shocks. With 42 different national currencies, nearly every African country has its own currency. This is a disaster. As a result,  Africa faces significant challenges:

• High exchange rate volatility – The Nigerian naira, Ghanaian cedi, and Egyptian pound lost over 40% of their value in 2022 alone.

• Costly currency conversions – Businesses lose $50 billion annually due to foreign exchange fees.

• Low intra-African trade – While Europe conducts 60% of trade internally, Africa’s figure stands at just 17%, largely due to currency barriers.

• Capital flight – Africa loses over $90 billion annually as businesses and individuals store wealth in foreign assets.

What Is a Stablecoin? And Why Is It Africa’s Best Bet?

A stablecoin is a digital currency designed to maintain a stable value by being backed by real-world assets. Unlike Bitcoin or Ethereum, which fluctuate in value, stablecoins are tied to commodities (like gold) or fiat reserves.

Stablecoins provide:

• Price stability – Unlike volatile cryptocurrencies, they maintain a predictable value

• Fast, low-cost transactions – Ideal for trade and remittances

• Borderless access – Eliminates costly foreign exchange conversions

• Protection against inflation – Preserves purchasing power

Take USDC (USD Coin) as an example. USDC is pegged 1:1 to the US dollar, meaning that for every 1 USDC in circulation, there is one actual US dollar held in reserve. This makes it a reliable digital alternative to cash. Holding USD reserves works for now, but it doesn’t solve Africa’s problem in the long run. Africa needs a currency solution that is stable, independent, and designed for intra-African trade.

So I began tinkering with what could work for Africa: a united currency, powered by technology and backed by African resources. Rumour has it that an African president once attempted to solve this problem with a pan-African currency (less the technology part), but he is no longer with us. As technology evolves and we become increasingly borderless, I believe Africa can greatly benefit from currency unification.

I call this currency the PASC, or the Pan-African Stablecoin, a term I ‘coined.’ Not sure how well it rolls off the tongue, but let’s keep it as a placeholder.

PASC: A Gold-Backed Pan-African Stablecoin

PASC would be backed by Africa’s vast gold reserves, ensuring monetary sovereignty and economic stability. Unlike USD-pegged stablecoins, PASC would be anchored in African resources, keeping wealth within the continent.

Its value would be backed by:

• Gold reserves from top producers like South Africa, Ghana, and Mali

• Strong-performing African currencies to ensure regional stability

• Other key commodities like oil, lithium, and rare earth metals

This model ensures stability and trust while promoting economic self-reliance.

As my life mission is to contribute to the economic empowerment of Africa, a good measure of success is GDP growth. I believe that with a unified currency, the GDP of Africa could double within the next five years. I make the case for how we can help achieve this.

Can PASC Double Africa’s GDP in Five Years?

Africa’s $3 trillion GDP makes it one of the world’s slowest-growing regions. Currency inefficiencies, trade barriers, and capital flight continue to limit its potential. Here’s how PASC could change that:

1. Eliminate FX Losses and Free Up $500B

   • Africa loses $50 billion annually to foreign exchange fees

   • 5-Year Impact: $200B+ in cumulative savings

2. Boost Intra-African Trade by $1.2 Trillion

   • Intra-African trade is just 17% due to currency fragmentation

   • The African Continental Free Trade Area (AfCFTA) aims to push this to 30% by 2030, but FX risks remain a challenge

   • 5-Year Impact: $1.2T in new trade and industrial growth

3. Strengthen African Currencies & Reduce Inflation ($1T Impact)

   • African currencies lose 10-30% of their value annually against the USD

   • A gold-backed PASC would act as a reliable store of value

   • 5-Year Impact: $1T in preserved capital

4. Unlock $600B in Diaspora Investment & Remittances

   • The African diaspora sends $95 billion home annually, but high remittance fees erode this value

   • Additionally, Africa loses $90 billion annually in capital flight

   • 5-Year Impact: $600B in retained wealth

5. Reduce Dependency on the West & Boost Economic Sovereignty ($500B Impact)

   • Africa relies on USD, IMF loans, and Western financial systems

   • PASC would create a sovereign African financial system

   • 5-Year Impact: $500B in increased economic independence

Can We Make PASC a Reality?

For PASC to succeed, it must gain buy-in from African governments, businesses, and financial institutions. The African Union (AU) has already been working on PAPSS, a system designed to make intra-African trade and settlement faster. As of August 2025, here is the list of banks that are on the PAPSS network. During my time at Paystack in 2022/2023, we attempted to work with some banks on the PAPSS rails with no success. It looks like a lot of progress has been made since then.

Key steps include:

1. Government & AfCFTA Endorsement

   • Position PASC as a trade currency, not a replacement for national currencies. This would make PAPSS more efficient and stable

   • Secure backing from ECOWAS, SADC, and EAC for regional adoption

2. Gold & Commodity-Backed Reserves

   • Work with gold-producing nations to ensure PASC’s stability

   • Reduce gold export to Western countries

   • Maintain reserve transparency to build trust

3. Banking & Fintech Integration

   • Partner with African banks and fintechs to facilitate PASC transactions

   • Enable mobile money interoperability (really important)

4. Tax Incentives & Government Adoption

   • Governments should accept PASC for tax payments

   • Businesses using PASC could benefit from tax incentives

5. Diaspora & Investment Portals

   • Develop PASC-based remittance platforms

   • Enable investments in real estate, startups, and infrastructure using PASC.

Final Thoughts

The Pan-African Stablecoin could be the most significant financial innovation in Africa’s history. If properly implemented, it could:

• Boost Africa’s GDP from $3T to $7T in five years

• Save billions in FX fees & capital flight

• Increase trade, investment, and job creation

• Give Africa true financial independence

For too long, Africa’s economy has been shaped by external forces, currency instability, and financial dependency. The PASC presents an opportunity to reclaim control, unlock prosperity, and position Africa at the forefront of the global financial system.

The question now is: Who will step up to make it happen? Maybe Africa needs its own Satoshi Nakamoto. 

My name is Joe Kinvi, and I’m building Borderless, the infrastructure that enables the Africa Diaspora to invest back home easily. We are in beta with 7 collectives, and as a reader of my newsletter, you can discover and join these collectives here.