Zambia Crypto: Sub‑Saharan Stablecoin Series
Mwaiseni, gentle reader! Zambia may not have seen Zimbabwe’s hyperinflation extremes, but its economy has had its own twists and turns. Let’s dive into why stablecoins could play a pivotal role in Zambia’s financial future.
Zambia’s Copper Industry has dictated the outlook of the economy for decades
Vital statistics
Population (2025): ≈21.91 million (median age: 17.9 years; urban population: 46.8% ≈10.26 million)
GDP: US $28.91 billion (nominal, 2025); US $98.15 billion (PPP, 2025)
Projected real GDP growth (2025): 6.2%
Inflation (consumer prices, 2023): ≈10.9%
Projected inflation (2025): 14.2%
Latest y/y inflation: 16.5% (Apr 2025)
Major industries: Copper mining & processing, construction, emerald mining, beverages, food, textiles, chemicals, fertilizer, and horticulture
Local currency: Zambian Kwacha (ZMW) – introduced 1968 (replaced Zambian pound) and rebased 1:1000 in 2013 (new Kwacha).
Zambia’s youthful population and widespread mobile phone use mirror trends across Africa. The country is largely cash-based, but U.S. dollars also circulate for big-ticket items (despite recent dedollarisation efforts). Over three-quarters of Zambians live in rural areas, so access to formal banking is limited – fertile ground for mobile money and crypto solutions.
A currency journey with twists
Known for its copper riches, Zambia has faced booms and busts. After independence in 1964, the Kwacha was strong for a time, but falling copper prices in the 1970s dealt a blow. By the 1990s, Zambia grappled with debt and high inflation, prompting IMF reforms and privatization of mines. The economy stabilized in the 2000s (inflation even fell to single digits), yet currency volatility persisted. In 2013, the Kwacha was rebased, chopping three zeros off its denominations to simplify transactions.
Fast-forward to the 2020s: copper output rebounded, but a severe drought in 2024 hurt agriculture and hydropower. Inflation rose for 15 consecutive months, peaking at 15.6% by September 2024. The Kwacha’s value slid to an all-time low of 27.3 per US$ in May 2024, reflecting scarce foreign exchange. In a controversial move, authorities even proposed banning local use of U.S. dollars (with 10-year jail penalties) to shore up the Kwacha. The IMF warned that such forced dedollarisation could be counterproductive without broader stability – a clear sign of the tug-of-war between market reality and policy.
Through it all, Zambians have maintained resilience. The Kwacha remains the official currency, but confidence in it can waver when droughts, debt or commodity swings hit. People and businesses have learned to adapt, often seeking refuge in U.S. dollars or dollar-linked assets when the local currency falters.
Current crypto landscape
With a history of Kwacha fluctuations, it’s no surprise some Zambians are turning to cryptocurrencies – especially stablecoins – as an alternative store of value. The government’s stance is cautiously optimistic: in early 2024, the Technology Minister launched tests for crypto regulation, touting cryptocurrency as a “driver for financial inclusion” and positioning Zambia as a regional fintech hub. This progressive approach suggests the country sees potential in digital assets if properly regulated.
On the ground, stablecoins like USDT and USDC are quietly making inroads. As foreign cash grew scarce and the Kwacha weakened in 2024, many businesses (from importers to small exporters) turned to stablecoins for transactions, leading to an estimated $2.2 billion in stablecoin volume that year in Zambia. Use cases include:
Cross-border trade: Entrepreneurs use stablecoins to pay suppliers in China or South Africa, avoiding high bank fees and delays. For instance, when the Kwacha was plunging, paying in USDT safeguarded value during transit.
Remittances: Zambians abroad can send USDC back home in minutes, sidestepping the ~7% average remittance fees in Africa. Recipients swap into cash or mobile money as needed.
Savings: Tech-savvy youth hedge their earnings by holding part in stablecoins, protecting their kwacha savings from inflation. Some even earn interest via DeFi, though this remains niche.
E-commerce and freelancing: A growing number of freelancers and developers in Lusaka accept payment in crypto. Stablecoins, being price-stable, are preferred over volatile coins for settling bills or converting to local currency on peer marketplaces.
Crucially, Zambia’s situation is part of a wider African trend – stablecoins now account for 43% of Africa’s crypto transaction volume as people seek refuge from currency instability. Zambian adoption is still early, but momentum is building thanks to a young, tech-aware population.
Problems and pain points
However, several financial pain points persist in Zambia’s status quo:
Kwacha volatility & inflation: The local currency’s value can swing wildly (over 30% depreciation in 2024), eroding purchasing power. Inflation, though lower than in some neighbors, still averaged ~15% lately – a stealth tax on savers.
Foreign currency shortages: It’s often challenging for businesses to access USD when needed. Banks impose strict limits, and the black-market rate can soar when the official rate is pegged. This crunch hampers imports and investment.
High remittance and transfer costs: Sending money into or out of Zambia through traditional channels is pricey. International wires take days and intermediaries shave off a hefty cut (via fees or poor exchange rates).
Limited financial inclusion: A large portion of the rural population remains unbanked. Even those with mobile money lack access to credit or savings instruments that hold value when the Kwacha falls.
Regulatory uncertainty: While the government is open to crypto, formal guidelines are still evolving. This ambiguity makes some would-be users hesitant, and banks sometimes warn against crypto use pending clearer laws.
In short, many Zambians are striving for a more stable and accessible financial toolkit. Could stablecoins be part of the answer?
How stablecoins could help
Picture a smallholder farmer in Mkushi selling organic honey to a client in Dubai. Instead of navigating a maze of bank forms and waiting weeks for a SWIFT payment, the buyer sends USDC. The farmer receives it instantly on her phone, and can swap to Kwacha in an emergency or hold the digital dollars as a hedge. This isn’t sci-fi – it’s increasingly feasible with today’s tech.
Benefits:
Store of value: Stablecoins like USDT (tied to the U.S. dollar) protect savings from Kwacha swings. Keeping money as digital USD during inflationary spikes can preserve wealth when local prices rise fast.
Cheaper, faster remittances: Stablecoin transfers cost a fraction of traditional remittances. Family members abroad can support relatives without enriching middlemen – more money ends up in Zambian wallets, and in seconds rather than days.
Access to global markets: With stablecoins, Zambian entrepreneurs can participate in international commerce without a domiciled bank account in foreign currency. Paying suppliers or getting paid for exports becomes smoother, boosting trade.
Financial inclusion via mobile: A basic smartphone is enough to hold a crypto wallet. Stablecoins could extend quasi-banking services (like savings or payments) to rural communities that have phones but no easy bank access.
And it’s not just small farmers or households. Larger businesses stand to gain too. Take mining and export firms: Zambia’s copper and gemstone exporters typically settle in USD, but often face delays and conversion mandates when bringing money onshore. If a copper parts manufacturer is paid in a dollar stablecoin, they could retain full value in digital dollars, avoiding multiple conversion fees. More capital stays in the business for buying machinery and paying workers – without waiting months for international bank wires. In fact, some forward-looking Zambian companies are already piloting blockchain payments to streamline trade. The result? Lower costs and less friction, which ultimately means more competitive Zambian goods on the world market and better margins to reinvest locally.
A word of caution
Stablecoins aren’t a silver bullet. They rely on the issuers holding real reserves, so users must trust that a USDC is truly backed by a U.S. dollar. Regulation is still catching up – Zambia will need clear rules to prevent scams and protect consumers. Education is paramount: people must learn about safeguarding their digital wallets (lest stablecoins be lost to hackers or mistakes). And of course, wider economic reforms (prudent budgets, diversified exports, etc.) are essential; crypto is a tool, not a cure-all for systemic issues.
Conclusion
Zambia’s monetary story has had its ups and downs, but its people have consistently shown ingenuity in the face of challenges. In this new chapter, stablecoins offer a ray of hope – a way to save in hard currency, trade without borders, and connect financially with the world, all without costly intermediaries. It won’t replace the Kwacha or fix the economy overnight, but for the tech-savvy market trader in Lusaka or the farmer in Kapiri Mposhi, crypto’s promise of greater control and stability is certainly worth a look. Mukoma Mari will be watching closely as Zambia finds its footing in the digital finance era.
This article is for informational purposes only and does not constitute financial advice. Readers should conduct their own research and exercise caution before making any investment decisions.