Crypto exchange giant Coinbase is making a strategic entry into African markets by partnering with local stablecoin platform Yellow Card. This significant expansion will enable Coinbase to offer its products to customers in 20 African countries.
Yellow Card, a prominent player in the African stablecoin exchange market, boasts a user base of nearly 1.4 million. Through this collaboration, it will become easier for users to access stablecoins, providing more convenient and cost-effective payment options.
Chris Maurice, Yellow Card’s co-founder and CEO, expressed enthusiasm about the collaboration. He emphasized that this partnership is a step towards enabling the next billion people in Africa to access and benefit from the evolving financial landscape.
“We are excited to join forces with Coinbase to extend the reach and impact of stablecoins to a broader audience across Africa,” Maurice stated.
Coinbase, on its part, emphasizes that its expansion into African markets is not just about business growth, but also about enhancing economic freedom in regions affected by high inflation, exorbitant fees, slow transaction speeds, and geopolitical constraints.
Additionally, the partnership gives special attention to the use of the USD Coin (USDC) stablecoin, chosen for its relative stability compared to local currencies, which often experience high volatility.
According to the announcement, this initiative is expected to be particularly beneficial for small and medium-sized enterprises (SMEs) in Africa and other developing economies. These SMEs often face significant challenges in opening US dollar and Euro accounts, which hinders their ability to grow and engage in cross-border transactions within Africa.
Coinbase highlighted the impact of this move on SMEs, stating, “Providing SMEs with access to USDC is essentially providing them with access to the global financial system. Any merchant can establish a Wallet in less than 30 seconds.” This indicates Coinbase’s commitment to empowering businesses in these regions by simplifying their integration into the global economy.
Africa: Youngest Continent
The United Nations data highlights that Africa boasts the youngest population globally, with nearly 60% of its inhabitants being under 25 years old. This demographic aspect is crucial for Coinbase’s expansion strategy, as the company recognizes the propensity of younger individuals to appreciate the advantages of cryptocurrencies. Coinbase notes that a significant majority of crypto owners worldwide, around 72%, are under the age of 34, indicating a strong alignment between the demographic profile of Africa and potential crypto adoption.
Africa’s rapidly growing crypto market, as reported by Chainalysis, further underscores the strategic importance of this expansion. Countries like Kenya, Nigeria, and South Africa are leading in crypto usage within the region. In these nations, cryptocurrencies are frequently used for commercial transactions. However, the inherent volatility of these digital assets often renders them impractical as a reliable store of value.
The introduction of a stablecoin like USDC, which is the second-largest by market capitalization, is poised to address these challenges. Stablecoins offer the benefits of cryptocurrency without the typical volatility associated with other digital assets. Coinbase points out the practicality of this move, especially for its Wallet users, who will have the ability to seamlessly send USDC without incurring fees on various platforms, including popular messaging apps like WhatsApp. This feature enhances the utility of USDC in everyday transactions, potentially transforming the financial landscape for many in Africa.
