Prominent figures in the crypto space recently revealed a notable pattern within the African crypto market, suggesting a growing preference among Africans for U.S. dollar-backed stablecoins over Bitcoin (BTC).
Russell Okung, a professional athlete known for his advocacy of Bitcoin, initiated the conversation on X. Okung disclosed promoting the Lightning Network during his stay in Africa, wherein he encountered a sobering reality.
Per the disclosure, a larger number of people were inclined towards dealing with USDT rather than Bitcoin. Essentially, he observed that African crypto enthusiasts generally preferred USD, even if it was in “synthetic” forms.
During my time in Africa, while advocating for the Lightning Network, I faced a cold, hard realization.
Despite my efforts, I found that more people were interested in dealing with USDT rather than Bitcoin.
They desired USD, even if they were synthetic versions.
— OKUNG 🥋 (@RussellOkung) February 18, 2024
In response, other X users commented about experiencing a similar situation in Africa and observed the same trend in Lebanon and Argentina as well. One user pointed out that financially struggling individuals cannot afford the volatility of cryptocurrencies. As a result, exposure to the USD remains a more secure option than their local currencies.
Similarly, Austin Campbell, Founder & Managing Partner of Zero Knowledge Consulting, recognized a comparable trend during his tenure as the chief risk officer at Paxos Trust Company, noting USD stablecoins remain the favored option for many individuals.
I witnessed the same behavior at Paxos; USD stablecoins were what most people desired to hold their money in.
That will remain so long as the USD is valued and the currency is well-managed. If it is not, that will change. This is the nature of all reserve currencies through… https://t.co/QddApOFepo
— Austin Campbell (@CampbellJAustin) February 19, 2024
Campbell highlighted that this preference will persist as long as the USD maintains its value. However, he noted the possibility of a shift in this dynamic should USD’s value or management falter.
Meanwhile, Campbell pointed out that the preference for stablecoins aligns with the understanding that cryptocurrencies like Bitcoin may function better as stores of value rather than mediums of exchange for everyday transactions.
To support his point, he drew a comparison with gold. Campbell stated that people do not typically use gold to pay for everyday items like sandwiches. Instead, they store gold in vaults and occasionally sell portions for more easily usable fiat currency to make purchases.
Essentially, he noted that no single form of money excels at both liquid and deep transactions while also serving as a reliable store of value. Ultimately, he considers the preference for USD stablecoin to be a significant shift from the local system of many countries.
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