Visa expands stablecoin strategy into Africa with Yellow Card partnership

Global payments and card infrastructure firm Visa has announced that it is partnering with pan-African cryptocurrency exchange and payments platform Yellow Card to expand its stablecoin settlement solution into Africa. 

The partnership looks to test integration opportunities between the exchange’s stablecoin-based cross-border infrastructure and Visa’s payment product, Visa Direct. 

The details 

• In a press release announcing the partnership, Visa said it plans to explore opportunities for stablecoins in the African financial landscape, especially in the markets where Yellow Card is licensed. 
• In addition, both firms will explore stablecoin market opportunities in treasury operations and liquidity management. 
• According to reports, Yellow Card plans to debut a stablecoin product with Visa in at least one African country where it is active before the end of the year. 

Dive deeper 

• In a call with Mariblock, Yellow Card’s chief of staff and director of strategy, Gillian Darko, said that businesses that are integrated with Visa can now be able to use stablecoins courtesy of the partnership. She said,

“Very simply put, corporations, companies, and some of our partners will now be able to utilize stablecoins if they're plugged into Visa... Corporates can hold USD liquidity in stablecoin form, reducing FX risk and transaction lag. Now, Visa and Yellow Card will be working together to see how to simplify that even better.” 

• Essentially, Visa plans to expand its stablecoin offering in Africa by leveraging Yellow Card’s existing infrastructure, beginning with the markets where the pan-African exchange is licensed. 
• An integration of such proportion combines “Visa’s scale with Yellow Card’s regional strength” to advance stablecoin adoption in Africa, Darko added. 
• The exchange is currently active in 20 African countries but licensed in three — Botswana, South Africa and Zambia while it is in the process of obtaining operational licenses in other countries such as Ghana and Nigeria. 
• Visa and Yellow Card also plan to pilot and scale stablecoin products in these licensed markets for a start. Darko said,

“We have been here in the market for quite some time [and we] have the leverage there. [Visa] is using Yellow Card’s support as we currently support a variety of stablecoins ... They are leveraging our network, operations and stablecoins to be able to do this.” 

• She added that while Visa has already processed stablecoin transactions to the tune of hundreds of millions of dollars globally, it plans to test out stablecoins in African markets using Yellow Card’s established payments network. 

Why this matters 

• Global companies looking to expand into other markets often must go through several regulatory hoops, paperwork and licensing processes before they can offer their products in these new markets. 
• As a result, global firms often skip certain markets or offer limited services, but many choose to partner with local companies instead.
• These local partners understand the market deeply, are already regulated, and help global firms navigate compliance, cut costs, and expand more easily.
• Earlier in the month, Mariblock reported that the blockchain housing firm Empowa expanded its services into Nigeria via a four-way partnership involving local firm PropPay, local housing cooperatives and local developers.