Why African Banks Can No Longer Afford to Ignore Digital Assets
Africa’s financial system has advanced through mobile money, instant payments, digital lending, open banking and tokenised products. This progress, supported by broader access to finance and stronger regulatory engagement, gives banks a clear foundation for responsible digital asset adoption.
The scale of change is already visible: in 2024, mobile money processed about 108bn transactions worth more than US$1.68trn, supported by over 2 billion registered accounts and more than 500 million monthly active users.
The opportunity is especially strong in Africa, where remittances remain costly. Sub-Saharan Africa recorded an average transfer cost of about 8.37% in 2024, reinforcing the need for more efficient channels such as real-time payments, stablecoins and Pan African Payment and Settlement System (PAPSS).
Digital assets are also gaining practical use. Stablecoins account for roughly 43% of crypto transaction volume in Sub-Saharan Africa, while PAPSS has reportedly expanded to 16 countries, 15 financial institutions and 14 national switches. Recent success stories from examples reinforces this shift. Mobile money is extending access beyond branches, real-time payment systems in Kenya, Nigeria and Ghana are improving transfer efficiency, PAPSS is supporting local-currency settlement, and platforms such as TymeBank, Flutterwave and M-Pesa show that African financial innovation can scale.
What Are Digital Assets?
Digital assets are items of value that exist electronically and can be stored, transferred, traded or settled digitally. In banking, they include cryptocurrencies, stablecoins, tokenised bonds or deposits, central bank digital currencies and tokens representing ownership or access rights.
How Global Banks Are Embracing Digital Assets
Global banks are already using digital assets to improve payments, settlement, custody and capital markets activity, showing that the technology is moving into mainstream financial infrastructure.
- J.P. Morgan uses Kinexys and JPM Coin for blockchain-based wholesale payments and near-real-time settlement.
- HSBC’s Orion platform supports tokenised bonds and real-world assets, including tokenised gold.
- Citi is exploring tokenised deposits, trade finance and faster institutional settlement.
- BNY Mellon, Standard Chartered and Societe Generale are active in regulated custody, tokenised bonds and stablecoin-linked market infrastructure.
These initiatives address long-standing challenges in efficiency, liquidity and client service.
Benefits of Digital Assets for Banks
- Faster settlement: Near-real-time movement of money and securities reduces delays.
- Lower costs: Tokenisation and shared ledgers reduce reconciliation, paperwork and duplication.
- Better liquidity: Tokenised deposits, stablecoins and digital collateral improve value movement across markets.
- New revenue: Banks can offer custody, tokenised products, blockchain payments and advisory services.
- Stronger controls: Digital records can improve transparency, audit trails and compliance monitoring.
Digital Asset Adoption: Africa vs Global Banks
Africa and global banks are adopting digital assets from different starting points. Africa’s adoption is driven by practical needs such as cheaper remittances, access to finance and mobile-first services, while global banks are focused on tokenisation, custody, wholesale settlement and regulated capital markets infrastructure.
| Area | Africa | Global Banks |
| Main driver | Solving everyday financial frictions such as high remittance costs, limited access to banking, currency volatility and slow cross-border payments. | Improving institutional finance through faster settlement, tokenised assets, digital custody, liquidity efficiency and new client services. |
| Adoption pattern | More consumer- and fintech-led, supported by mobile money, stablecoins, instant payments and digital wallets. | More bank- and institution-led, supported by regulated platforms, custody solutions, tokenised deposits and capital markets pilots. |
| Use cases | Payments, remittances, savings in stable value, merchant settlement, mobile money integration and financial inclusion. | Wholesale payments, securities settlement, tokenised bonds, tokenised deposits, digital asset custody and trade finance applications. |
| Regulatory position | Regulation is evolving, with many markets moving from caution to licensing, supervision and clearer virtual asset frameworks. | Regulation is more developed in major financial centres, allowing large banks to launch controlled products within institutional and compliance-heavy environments. |
| Key strength | Africa has strong demand, mobile-first adoption and real-world use cases that address urgent financial gaps. | Global banks have scale, balance sheets, compliance infrastructure and trusted client relationships to institutionalise digital assets. |
| Main challenge | Trust gaps, uneven regulation, limited infrastructure, education barriers and consumer protection concerns. | Regulatory complexity, technology integration, operational risk, cybersecurity, reputational risk and the need to prove commercial value. |
For African banks, the lesson is clear: digital assets are not just a crypto trend. They will offer a route to modernise payments, expand access, support trade and protect client relevance, provided banks manage the risks carefully.
Challenges African Banks Face
African banks face several barriers that could slow adoption if not addressed through clear regulation, investment, partnerships and strong controls.
- Regulatory uncertainty around licensing, taxation, consumer protection and cross-border activity.
- Trust and education gaps caused by fraud, volatility and limited customer understanding.
- AML/CFT and financial crime risks requiring strong due diligence, monitoring and blockchain analytics.
- Legacy technology, cybersecurity and custody risks that complicate integration and safekeeping.
- Talent shortages and fragmented markets that make regional scale harder.
Solutions to the Challenges
The response should be phased and risk-based. Before launching complex products, banks should strengthen governance, compliance, technology, customer education and partnerships.
- Engage regulators to shape clear licensing, consumer protection and supervisory frameworks.
- Build robust AML/CFT controls, including due diligence, sanctions screening, monitoring and escalation.
- Invest in secure custody, cybersecurity, private key controls and incident response.
- Modernise gradually through APIs, modular platforms and controlled pilots.
- Educate customers and staff on benefits, risks, fees, controls and responsibilities.
- Partner with regulated fintechs, custody providers, payment networks and technology firms to scale safely.
Banks should begin with lower-risk, high-impact use cases such as regional payments, tokenised deposits, custody partnerships and trade settlement, while maintaining trust and financial stability.
Examples of Successful Partnerships
Partnerships with fintechs, payment networks, telecoms and regulators can help African banks scale digital finance quickly and safely.
- M-Pesa and Kenyan banks have widened access to payments, savings, credit and merchant services.
- PAPSS, Afreximbank and central banks are enabling local-currency regional settlement.
- Ecobank, Flutterwave, MFS Africa and stablecoin payment partnerships show how collaboration can improve commerce, interoperability and settlement.
The message is clear: responsible adoption depends on combining market opportunity with strong governance, credible partners and practical use cases.
The future of banking in Africa will belong to institutions that combine innovation with trust, speed with security and ambition with responsible governance.
African banks do not need to adopt digital assets recklessly, but they cannot afford to stand still. Banks that build strong controls, partner with credible innovators and focus on practical use cases will be better positioned to protect trust, unlock growth and remain central to Africa’s financial future.
About the writer
Carl Odame-Gyenti, PhD is the author of Dare to Dream book, a Financial Institutions and Fintech Coverage working with an International Bank in Kenya, East Africa. Contact: Carl.odamegyenti2@gmail.com, Cell: +254 70 5459061
Finance and Investment professional, Country Head (Ag) of Client Coverage with an International Bank in Sierra Leone.
Disclaimer: "The views expressed in this article are the author’s own and do not necessarily reflect ModernGhana official position. ModernGhana will not be responsible or liable for any inaccurate or incorrect statements in the contributions or columns here."