Flutterwave and Tempo Payments are collaborating to use USDC on Stellar to target Africa’s massive remittances market.
The Stellar Development Foundation (SDF) has announced that the USD Coin (USDC) stablecoin will be used to facilitate a new remittance channel between Europe and Africa.
The SDF announced on Monday that global payments technology company Flutterwave will use the Stellar network’s USD Coin (USDC) stablecoin to simplify remittances between Africa and Europe.
Tempo Payments, a Paris-based money transfer operator, will collaborate with Flutterwave as Stellar’s primary European Union payments partner.
According to Olugbenga Agboola, CEO of Flutterwave, sending money to Sub-Saharan Africa is more expensive than sending money to any other region in the world. He went on to say that the new partnership will help to expand the network and “bring critical, cost-effective money transfer services to African business owners.”
Flutterwave claims to have processed over 140 million transactions totaling more than $9 billion to date, while serving over 290,000 businesses such as Uber, Booking.com, and Facebook. The company already has a presence in over 33 African countries, including Nigeria, Rwanda, Uganda, Kenya, and South Africa.
For about a year, the SDF has been focusing on Africa, with the foundation partnering with East African payments firm ClickPesa in November 2020. ClickPesa connects to the banking systems of Tanzania, Kenya, and Rwanda.
Stellar and its partners will face stiff competition in Africa, where several payment companies already operate, including WorldRemit, Azimo, Transferwise, Payoneer, and Xoom.
Because a large portion of the African population is unbanked, Africa has emerged as a critical market for payment companies. Remittances, on the other hand, have fallen during pandemic-induced lockdowns, with Africa.com reporting a 28% drop in remittances to Nigeria last year.
The publication also predicted that more transfers will be made in cryptocurrencies by 2025, and that digital assets are likely to penetrate Africa’s remittance market despite local governments’ exclusionary policies.
Stellar announced in February that it had integrated Circle’s USDC stablecoin. USD Coin has grown dramatically in 2021, with its market cap increasing by 733 percent since the beginning of the year to $32.5 billion.
According to CoinGecko, Stellar’s native token, XLM, has gained 2.2 percent in the last 24 hours to trade at $0.386. However, XLM is still down 56% from its all-time high of $0.875 in January 2018.