Stablecoin exchange is the most expensive in Africa, according to data
According to data monitored by payments infrastructure company Borderless.xyz, Africa recorded the highest median stable coin-to-fiat conversion spread in January, covering 66 currency corridors and nearly 94,000 price observations.
The regional median spread was 299 basis points, or about 3%, compared to 1.3% in Latin America and 0.07% in Asia. In Africa, conversion costs ranged from 1.5% in South Africa to 19.5% in Botswana.
The data measures the “spread,” or the gap between the provider's buy and sell rate on a stable coin-to-fiat pair. Similar to the bid-ask spread in traditional markets, it reflects the execution cost of converting a stablecoin to a local fiat currency.
The findings show that while promoting stablecoins as a cheaper alternative to traditional remittances, prices across African markets vary widely and appear to be linked to local supplier competition and liquidity.
Competition drives price gaps.
Borderless.xyz has found that marketplaces with many competing providers generally have conversion costs ranging from 1.5% to 4%. In markets with only one supplier, costs often exceed 13 percent.
Botswana recorded the highest average conversion cost in January at 19.4%, although pricing improved later in the month. Congo's spending was also over 13 percent. In contrast, South Africa, which has a competitive foreign exchange market, posted a cost of about 1.5%.
The report says these differences stem primarily from local market conditions, such as liquidity and competition, rather than the underlying blockchain technology. In countries where multiple suppliers operate, switching costs are closer to the regional average.
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Stablecoins with traditional foreign currency
The report measures what it calls the “TradFi premium” and compares stablecoin median rates to traditional interbank foreign exchange rates.
This measure reflects whether Statcoin currency prices are cheaper or more expensive than traditional FX mid-market prices.
Among 33 currencies globally, the median difference between stablecoin exchange rates and traditional market median foreign exchange rates was 5 basis points, or 0.05%, indicating that the two are largely in line.
In Africa, the median gap was wider at 119 basis points, or around 1.2%, although the difference varied significantly by country.
On January 24, economist Vera Songwe said at the World Economic Forum in Davos that stablecoins are helping to reduce the cost of money transfers across Africa, where traditional transfer services charge $6 per $100 sent.
The new data adds context, suggesting that while stablecoins offer faster settlements and potential savings compared to legacy services, conversion costs in certain corridors remain high.
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