Stablecoin Cross-Border Payments Explained: How Visa, M-Pesa, and Onafriq Are Revolutionizing Remittances in Africa

Did you know that sending money across borders in Sub-Saharan Africa costs an average of nearly 8% of the transfer amount? That’s the highest remittance cost in the world. Visa, mobile money giant M-Pesa, and pan-African payments network Onafriq have launched a pilot program in the Democratic Republic of Congo (DRC) using U.S. dollar-pegged stablecoins to settle cross-border mobile transactions. For crypto users, this represents a major shift in how money moves across borders—and a potential disruption to the traditional SWIFT banking system. This guide explains how stablecoin-powered payments work, why the DRC was chosen for the pilot, and what this means for the future of remittances in Africa. You’ll learn the technical mechanics, the regulatory challenges, and how this could save users money.

Read time: 10-12 minutes

Understanding Stablecoins for Beginners

A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, like the U.S. dollar. Think of it like a digital gift card: it represents real value (dollars) but exists in a digital form that can be transferred instantly online.

Why were stablecoins created? Traditional cryptocurrencies like Bitcoin can be volatile—their value might swing 10% in a day. That makes them impractical for everyday payments or sending money to family abroad. Stablecoins solve this by maintaining a 1:1 peg to a fiat currency. If you send $100 worth of USDC or USDT, the recipient gets $100, not $85 or $115 depending on market fluctuations.

A real-world example: A person in the DRC needs to pay a supplier in Kenya. Instead of using a bank transfer that takes 3-5 days and costs 8% in fees, they use M-Pesa, which partners with Visa to convert their local currency into a stablecoin, send it across the border instantly, and convert it back to the local currency on the other side. The stablecoin acts as a neutral, stable bridge between two different monetary systems.

The Technical Details: How Stablecoin Cross-Border Payments Actually Work

Here’s how the Visa, M-Pesa, and Onafriq pilot processes a cross-border transaction:

1. User Initiates Payment: A user in the DRC sends money through their M-Pesa mobile money account, selecting a recipient in another African country.

2. Currency Conversion to Stablecoin: M-Pesa (via Onafriq) converts the local Congolese Franc into a U.S. dollar-pegged stablecoin, such as USDC on a blockchain like Stellar or Ethereum.

3. Blockchain Settlement: The stablecoin is transferred across the blockchain network in minutes, bypassing the traditional SWIFT banking system and its multiple intermediary banks.

4. Conversion at Destination: Onafriq receives the stablecoin on the recipient’s side and converts it back to the local currency (e.g., Kenyan Shilling or Nigerian Naira), which is then deposited into the recipient’s M-Pesa wallet.

Key Components:

Stablecoin (Digital Dollar): Acts as the neutral settlement layer, avoiding volatility.
Blockchain Network (e.g., Stellar, Ethereum): Provides the infrastructure for fast, transparent transfers with no intermediaries.
M-Pesa: The user-facing mobile money interface that millions already use daily.
Onafriq: The pan-African payments network connecting different mobile money systems across countries.

Why This Structure Matters: For users, the experience remains the same—using M-Pesa as usual. But on the back end, the speed drops from days to minutes, and costs could drop dramatically because multiple intermediary banks and their fees are removed.

Current Market Context: Why This Matters Now

The pilot in the DRC comes at a critical time. According to the World Bank, remittance costs in Sub-Saharan Africa average nearly 8%, making it the most expensive corridor globally. Traditional cross-border transfers using the SWIFT network can take 3-5 days and pass through several banks, each charging fees.

Meanwhile, stablecoin adoption is surging. As of mid-2025, the total stablecoin market cap exceeds $160 billion, and monthly transfer volumes now routinely surpass $1 trillion. Major financial institutions, including Visa and Mastercard, are actively exploring blockchain solutions for payment settlement.

The DRC was chosen for the pilot because of its rapid mobile money adoption. The country has leapfrogged traditional banking, with millions relying on mobile wallets for daily transactions. This makes it a perfect testing ground for integrating stablecoins into the existing mobile money ecosystem.

Competitive dynamics are also accelerating. Mastercard recently partnered with Safaricom (the company behind M-Pesa) to improve cross-border payments in Kenya. Visa’s move with M-Pesa and Onafriq represents a direct response, positioning stablecoins as the backbone for next-generation remittance infrastructure.

Competitive Landscape: How Visa’s Approach Compares

Feature	Visa + M-Pesa + Onafriq (Stablecoin Pilot)	Mastercard + Safaricom (Traditional Partnership)	Traditional SWIFT Banking
Settlement Method	Blockchain-based stablecoin transfer	Traditional card/payment rail integration	Central bank correspondent banking
Transfer Speed	Minutes	1-2 days (typically)	3-5 days
Average Cost	Potentially <2% (est.)	3-5% (typical)	~8% (Sub-Saharan Africa average)
User Interface	M-Pesa mobile money (unchanged)	M-Pesa or card-based	Bank account/wire transfer
Geographic Reach	Pan-African via Onafriq network	Focused on Kenya initially	Global but expensive for Africa corridors
Regulatory Challenge	Central Bank of Congo’s dollarization concerns	More established regulatory pathway	Heavily regulated but slow

Why This Matters: Visa’s stablecoin approach could be significantly faster and cheaper than both Mastercard’s traditional partnership and existing banking rails. However, it faces a unique regulatory hurdle in the DRC, where the central bank is actively trying to reduce dollarization of the economy—while stablecoins effectively embed digital U.S. dollars into the mobile payment system.

Practical Applications: Real-World Use Cases

International Remittances for Families: A worker in South Africa sends $200 back to family in the DRC. Using M-Pesa with stablecoin settlement, the funds arrive instantly and cost under $4, versus $16 via traditional channels. This directly impacts family welfare.

Cross-Border Business Payments: A small business owner in Kinshasa needs to pay a supplier in Nairobi. Instead of waiting days for a bank transfer, the payment settles in minutes using stablecoins, allowing faster inventory turnover and reducing cash flow pressure.

Freelancer Payments: African freelancers working for international clients can receive payments in stablecoins through M-Pesa, avoiding the high fees and long delays of traditional wire transfers. The stablecoin peg ensures they receive the exact amount billed.

Emergency Aid Distribution: NGOs operating in the DRC can use the stablecoin network to quickly and transparently disburse aid funds to recipients’ M-Pesa wallets, reducing administrative overhead and ensuring funds reach those in need faster.

Merchant Settlement: Regional merchants accepting mobile payments can settle cross-border transactions at the end of each day rather than waiting a week, improving their working capital efficiency.

Risk Analysis: Expert Perspective

Primary Risks:

1. Regulatory Risk: The Central Bank of Congo has actively promoted using the local franc to reduce dollarization. Stablecoins, being digital dollars, directly conflict with this policy. The pilot could face regulatory pushback or new restrictions.

2. Technical Risk: Blockchain networks can experience congestion or high gas fees, potentially making small-value transactions uneconomical. Layer 2 solutions or networks like Stellar mitigate this, but it remains a concern.

3. Stablecoin Peg Risk: While rare, stablecoins can de-peg from the U.S. dollar if their backing reserves face issues. A de-pegging event during a transaction could cause financial loss.

4. User Education Risk: Millions of M-Pesa users may not understand how stablecoins work. If something goes wrong—like a failed transaction—user trust could be damaged.

Mitigation Strategies:

Partnering with Yellow Card: Visa has partnered with African crypto exchange Yellow Card to explore stablecoin treasury operations, ensuring proper liquidity management and oversight.
Phased Rollout: The pilot is deliberately small-scale, allowing Visa and M-Pesa to test and refine the system before wider deployment.
Regulatory Engagement: Partners are likely working closely with the Central Bank of Congo to find a regulatory framework that supports both innovation and monetary policy goals.

Expert Consensus: Blockchain-based settlement for mobile money is inevitable in the medium term. The key question is whether the regulatory environment can evolve quickly enough to capture the benefits while managing risks.

Beginner’s Corner: Quick Start Guide

If you’re an M-Pesa user interested in how this might work in the future:

1. Understand Stablecoins: Learn the difference between fiat-collateralized stablecoins (USDC, USDT) and algorithmic ones (like the failed UST). Stick with well-audited, regulated options.

2. Monitor M-Pesa Updates: Watch for official announcements from Safaricom regarding any expansion of this pilot to your country or user base.

3. Know Your Wallet: If stablecoins become available, you’ll likely need a non-custodial wallet (like MetaMask) or a supported exchange account (like Yellow Card) to receive them.

4. Compare Fees: When sending money, compare the stablecoin route’s fees against traditional mobile money transfers and bank wires. The difference should be significant.

5. Stay Informed on Regulations: Follow Central Bank of Congo updates on digital currencies and dollarization policies, as these directly affect service availability.

Common Mistakes to Avoid:

Sending stablecoins to the wrong blockchain network (e.g., sending USDC on Ethereum to a Solana address)
Using unregulated or un-audited stablecoins
Holding large amounts of stablecoins without understanding the issuer’s reserve transparency

Future Outlook: What’s Next

The Visa, M-Pesa, and Onafriq pilot is expected to run for several months in 2026, with a potential wider rollout across other African markets if successful.

Planned developments include:

1. Expansion with Yellow Card: Visa’s existing partnership with African crypto exchange Yellow Card suggests a broader strategy for stablecoin treasury operations and international settlements across the continent.

2. Layer 2 Integration: To reduce transaction costs, the pilot may incorporate Layer 2 scaling solutions or high-throughput blockchains like Stellar (already optimized for low-cost transfers).

3. Regulatory Framework: The Central Bank of Congo may develop specific regulations for stablecoin-based payments, potentially creating a template for other African central banks facing similar dollarization challenges.

Regulatory Trends: The European Union’s MiCA regulation, which specifically classifies stablecoins as “e-money tokens” or “asset-referenced tokens,” may influence how African regulators approach these digital dollars. Clear classification and oversight could accelerate adoption.
Potential Impact: If successful, this model could be replicated across the continent, potentially reducing the average 8% remittance cost to under 2% and enabling financial inclusion for millions of unbanked Africans.

Key Takeaways

Visa, M-Pesa, and Onafriq are testing stablecoins for cross-border mobile payments in the DRC, potentially reducing transfer costs from ~8% to under 2% and settlement times from days to minutes.
Stablecoins act as a digital U.S. dollar bridge between different African mobile money systems, bypassing the slow and expensive SWIFT network.
The pilot faces a critical regulatory challenge: The Central Bank of Congo wants to reduce dollarization, while stablecoins effectively embed digital dollars into the economy.
If successful, this model could transform remittances across Sub-Saharan Africa, saving families and businesses billions in fees annually.

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