Safe, inclusive, low-cost, transparent, traceable, and innovation-enabling. That sums up the advantages of cryptocurrencies, pioneered by Bitcoin. Their downside is volatility. Data aggregator Trading Economics shows Bitcoin’s exchange rate versus the dollar jumped 55% between November and December, and almost 50% between April 8 and May 22. Between July 2024 and July 2025, Bitcoin’s value doubled. 

Enter stablecoins, a type of cryptocurrency whose value is pegged to real-world currency, commodities, or financial instruments,” according to Investopedia, an investment platform. Therefore, their value fluctuations are more predictable and less extreme than other cryptocurrencies.

Stablecoins are gaining popularity in MENA. According to LeanTech, a MENA stablecoin platform developer, the region is “the fastest growing market for crypto transfers.” Meanwhile, U.S. think tank Chainalysis ranked MENA the seventh-largest cryptocurrency market in the world in 2024. Africa is also witnessing fast adoption of stablecoins, with Nigeria, South Africa, Ethiopia, and Kenya among the world’s top 30 adopters in the 2024 Global Adoption Index.

Egypt, which trades with the MENA region and eyes expansion in Sub-Saharan Africa, prohibits cryptocurrencies without prior approval, thereby missing out on potential cross-border trade opportunities. “With the payments landscape more dynamic and competitive than ever, stablecoins are emerging as one of the most promising tools for faster and more accessible digital payments,” Godfrey Sullivan, Visa’s senior vice president and head of products and solutions for Central Europe, the Middle East and Africa, said in a press release.

Preferred digital currency?

In MENA, Chainalysis estimated stablecoins accounted for 52% of cryptocurrency transactions during fiscal year 2023/2024. Bitcoin was second with 17%. Top users were Turkey (55.2% of crypto activity), the UAE (51.3%), and Saudi Arabia (46.1%), surpassing the global average of 44.7% between June 2023 and June 2024. 

Chainalysis said the high penetration in Turkey, where the currency isn’t pegged to the dollar, is mainly because of its “long history of economic instability and high inflation,” adding that it “reflects [citizen] concerns over volatility and a need for consistent stores of value.” Global Crypto Adoption Index ranked Turkey 11th in 2024.

Alternatively, Gulf Cooperation Council (GCC) countries, with their dollar-pegged currencies, see “the growing adoption of stablecoins as likely reflecting their popularity as an on-ramp to broad crypto services and trading,” the Chainalysis report said.

Mohamed Damak, managing director and financial institutions sector lead at S&P Global Ratings, told news platform Arab Gulf Business Insights in March, “For Saudi Arabia, [stablecoin growth] was driven by the country’s relatively youthful population and their interest in this new technology,” as “just under half of Saudi Arabia’s population of roughly 34 million people is under the age of 30.” 

LeanTech noted stablecoin transactions in Saudi Arabia are a legal “gray area.” Laws allow “holding, trading and investing in digital assets,” but “the Standing Committee on Dealing in Unauthorized Securities activities in the Foreign Exchange Market has banned financial institutions from dealing in or with digital assets.” 

Conversely, UAE stablecoin growth “is probably related to the regulatory initiatives in the country,” Damak said. A May report from PwC singled out the Payment Token Services Regulation. It mandates that all parties involved in stablecoin transactions be licensed, comply with anti-money laundering laws and counter-terrorism financing standards, and ensure fiat reserves cover all issued stablecoins.

Damak said the UAE “wants to capture a portion of the DeFi (Decentralized Finance) and crypto activities.” According to the World Economic Forum, DeFi is “like mobile phones. [It] has the potential to be a leapfrog technology, enabling the underbanked to bypass traditional finance and gain access to digital services and assets previously unavailable.”

Bahrain also allows stablecoins, having “launched crypto asset mobile in 2019 through which companies in [the country] must get a license and follow anti-money laundering regulations to run a cryptocurrency exchange,” LeanTech said. 

Oman is “in progress,” having established its Virtual Assets Regulatory Authority in March 2022. The authority is responsible for regulating and overseeing the provision, use, and exchange of virtual assets. 

Qatar and Kuwait prohibit stablecoins. In 2020, “the Qatar Financial Centre Regulatory Authority declared that all virtual asset services are banned … except for digital asset services concerning token securities [which digitally prove ownership of a real-world asset].” 

In July 2023, Kuwait “placed an absolute ban on all digital asset mining, prohibited the recognition of crypto as a decentralized currency, and warned the public that companies are not allowed to provide any type of crypto-related services,” LeanTech said. 

Sub-Saharan potential 

African nations, with historically high inflation and poor-performing economies, have also taken a fondness for stablecoins. According to a Chainalysis report published October 2024, stablecoins “account for approximately 43% of the Sub-Saharan African region’s total [cryptocurrency] transaction volume.”

Nigeria ranked second in the 2024 Global Adoption Index, receiving nearly $22 billion in stablecoins, while its currency lost more than two-thirds of its value from mid-2023 to 2024. 

South Africa, ranked 30th globally, had the second-highest influx of stablecoins with $13.5 billion. Fueling that influx was high currency volatility, dependence on remittances, and low inclusion levels, noted Peter Mure, marketing director at Yellow Card, a South African stablecoin trading platform.

Notable stablecoin growth pockets on the continent are Ethiopia and Kenya, ranked 26th and 28th on the 2024 Global Adoption Index, according to Chainalysis. While they didn’t receive as much influx of stablecoins as South Africa last fiscal year, their adoption rates remain higher.  

Egypt losing out?

Egypt, with its managed-float currency, prohibits cryptocurrencies without Central Bank approval. A January note from Anderson Egypt law firm blamed the “misunderstanding” of stablecoins and the technology they use for the ban. “Many view these digital assets as a quick path to wealth or associate them with illegal activities,” the law firm said. 

Meanwhile, the government “views unregulated financial systems as threats to national stability and security [as well as] the stability of the Egyptian pound.” 

There is also a local religious narrative against stablecoins. “The ruling of … Egypt’s Grand Mufti … argued that the speculative nature of cryptocurrencies, along with their potential for fraud and misuse, conflicted with the principles of Islamic finance,” Anderson Egypt said. That resulted in a public aversion to cryptocurrency, the law firm noted.

For Egypt, not using stablecoins could limit bilateral trade with Saudi Arabia, Turkey, and the UAE, three of Egypt’s top five trade partners in 2024. The United States, Egypt’s third-largest trading partner, passed legislation (GENIUS Act) in June endorsing stablecoins. Currently, only China, Egypt’s top trading partner, prohibits the use of stablecoins.

Here to stay?

Recent activity from international financial services companies suggests that stablecoins have already become an integral part of the global financial system.

In July, Visa announced its cardholders can use stablecoins to pay for goods and services in the Middle East and Africa, as well as in Central and Eastern Europe. Also that month, MasterCard expanded its stablecoin network to include USDC, PYUSD, and FIUSD stablecoins, all backed by the dollar, allowing its “over 3.5 billion Mastercard cards in circulation [to] securely engage with crypto,” the press release said.  

A PricewaterhouseCoopers’ July paper noted that stablecoins will eventually “integrate with existing financial systems, … transforming the payment landscape,” adding, “Traditional payment rails will become utilities, with stablecoins forming the foundation of a new financial stack.”

Emerging markets that don’t allow stablecoins should quickly reverse their legal course, giving access to citizens, companies, and institutions, stressed Sullivan of VISA. “We believe that every institution that moves money will need a stablecoin strategy.” 

This article first appeared in August’s print edition of Business Monthly.