Stellar Facilitates Remittances Between Europe and Africa Using USDC Stablecoin
This week, the Stellar Development Foundation (SDF) announced that it would support the establishment of a completely new remittance channel between Europe and Africa, which will make use of the USD Coin (USDC) stablecoin. The Stellar Development Foundation (SDF) announced on October 25 that the global finance technology business Flutterwave would deploy the USD Coin (USDC) stablecoin on the Stellar network to ease transfers between Africa and Europe.
Tempo Payments, a money transfer operator located in Paris, will collaborate with Flutterwave as Stellar’s primary EU funds affiliate in the European Union. Olugbenga Agboola, CEO of Flutterwave, said that it is more expensive to transport money to Sub-Saharan Africa than it is to transfer money to any other part of the world.
He went on to say that the fresh new relationship would aid in the expansion of the community as well as “the provision of critical, cost-effective money transfer services to African company owners.” Flutterwave claims to have completed more than 140 million transactions valued at more than $9 billion to date, while servicing over 290,000 organizations, including Uber, Booking.com, and Facebook, among others.
The organization already has infrastructure in place in more than 33 African countries, including Nigeria, Rwanda, Uganda, Kenya, and South Africa, in addition to its headquarters in Nairobi. In November 2020, the SDF will partner with East African financial agency ClickPesa, a partnership that has been in the works for almost one year and will be completed in November 2020.
ClickPesa provides on- and off-ramps to the financial systems of Tanzania, Kenya, and Rwanda, among other countries. Stellar and its partners are up against fierce competition in Africa, where a number of financial firms, including WorldRemit, Azimo, Transferwise, Payoneer, and Xoom, are already active.
Because a large proportion of the population remains unbanked, Africa has emerged as a crucial market for financial services companies. In contrast, remittances have decreased as a result of pandemic-induced lockdowns, with Africa.com recently reporting a 28 percent decline in remittances to Nigeria in the previous calendar year.
Moreover, the publication anticipated that more transfers would likely be done in cryptocurrencies by 2025, and that digital assets are expected to infiltrate Africa’s remittance sector despite the existence of exclusionary insurance policies from local governments. In February, Stellar announced that it has integrated Circle’s USDC stablecoin onto its platform. In 2021, USD Coin has made tremendous strides, with its market capitalization increasing by 733 percent from the beginning of the year to a total of $32.5 billion.
As reported by CoinGecko, Stellar’s native currency, XLM, has risen 2.2 percent in the last 24 hours, and is now trading at $0.386 a coin. However, XLM is still down 56 percent from its all-time high of $0.875, which it reached in January of this year.