Africa's Trade Revolution: Stablecoins and IOTA Poised to Unlock $70 Billion
Africa is embarking on a significant digital transformation of its cross-border trade, with a new initiative leveraging stablecoins and the IOTA network. This ambitious project aims to streamline payments, digitize trade documents, and enhance interoperability across the continent's 55 member states, potentially unlocking billions in economic value.
Key Takeaways
- A new digital trade initiative, ADAPT, is set to revolutionize cross-border commerce in Africa.
- Stablecoins, particularly USDT, will be central to facilitating instant payments.
- The IOTA network will provide the underlying infrastructure for secure and efficient transactions.
- The initiative aims to reduce significant costs and delays currently plaguing African trade.
Overhauling Intra-African Trade
The Africa Digital Access and Public Infrastructure for Trade (ADAPT) initiative, a collaboration involving the African Continental Free Trade Area (AfCFTA) Secretariat, the IOTA Foundation, the Tony Blair Institute, and the World Economic Forum (WEF), is designed to create a unified, open-source digital public infrastructure. This platform is intended to enable instant cross-border payments, verifiable digital trade documents, and interoperable digital identities for all member nations.
Dominik Schiener, founder of the IOTA Foundation, highlighted the initiative's focus on solving the trade finance aspect after addressing the digitization and authentication of trade documents. "We will also offer tokenization of physical assets such as commodities and critical minerals, and cross-border payments using stablecoins like USDT for real-world payments," Schiener stated.
Addressing Current Trade Challenges
African traders currently face substantial financial burdens, with an estimated $25 billion in annual payment transaction fees and billions more lost to document fraud. The existing trade logistics are heavily reliant on analog processes, often requiring numerous entities to exchange hundreds of paper documents for a single shipment. For instance, border agents in Kenya previously had to access 13 different systems to verify a consignment.
Promising Pilot Results and Future Expansion
Pilot deployments of IOTA's technology in Kenya and Rwanda have already demonstrated significant improvements. Kenyan exporters have reported savings of approximately $400 per month on printing and documentation, while freight forwarders have reduced manual paperwork by up to 60%. Border clearance times have dramatically decreased from six hours to around 30 minutes.
Kenya is projected to handle around 100,000 transactions daily on IOTA's distributed ledger upon full implementation in the first quarter of 2026. ADAPT will initially launch in Kenya, Ghana, and a third country (likely in North Africa) before expanding continent-wide from 2026. The ultimate goal is to integrate all 55 AfCFTA nations by 2035.
Economic Impact and Vision
The AfCFTA estimates that this digitalization effort could double intra-African trade, unlock $70 billion in trade value, and generate $23.6 billion in annual economic gains. Schiener emphasized the potential for financial inclusion, stating, "We could help a miner in Rwanda get access to onchain trade finance at 50% of the cost, getting paid almost instantly with low transaction fees using USDT." This approach aims to anchor the cryptocurrency industry with real assets and tangible adoption, moving beyond speculative cycles.