Stellar Partners Use USDC to Build New Europe-Africa Remittance Corridor

The Stellar Development Foundation (SDF) announced that it will use USD Coin (USDC) to create a new remittance corridor between Europe and Africa.

On October 25, SDF announced that global payment technology company Flutterwave will use the USDC stablecoin on the Stellar network to simplify remittances between Africa and Europe.

Flutterwave will work with Paris-based money transfer operator Tempo Payments, Stellar’s main payments partner in the EU.

Olugbenga Agboola, CEO of Flutterwave, commented that sending money to sub-Saharan Africa is more expensive than sending money to any other part of the world. He added that the new partnership will help expand this network and "provide African business owners with the most important and cost-effective remittance service".

Flutterwave claims to have processed more than 140 million transactions to date, worth more than $9 billion, serving more than 290,000 businesses, including Uber, Booking.com, and Facebook. The company has established infrastructure in more than 33 African countries, including Nigeria, Rwanda, Uganda, Kenya and South Africa.

The SDF has been targeting Africa for almost a year, and in November 2020 the foundation partnered with East African payments company ClickPesa. ClickPesa provides access to the banking systems of Tanzania, Kenya and Rwanda.

Stellar and its partners face stiff competition as several payment companies already operate in Africa, including WorldRemit, Azimo, Transferwise, Payoneer and Xoom.

Africa has become a key market for payments companies because many Africans remain unbanked. However, remittances have declined during the COVID-19-induced lockdown, with Africa.com recently reporting a 28% drop in remittances sent to Nigeria in the last year.

The site also predicts that by 2025, more transfers will be made in cryptocurrencies, adding that digital assets could penetrate Africa’s remittance market despite exclusionary policies from local governments.

In February, Stellar announced that it had integrated Circle’s USDC stablecoin. USDC has seen tremendous growth in 2021, with its market capitalization surging 733% since the beginning of the year to $32.5 billion.

Stellar’s native token, XLM, is up 2.2 percent over the past 24 hours to trade at $0.386, according to data from CoinGecko. However, XLM is still down 56% from its all-time high of $0.875 reached in January 2018.

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