Nigerian-founded fintech Kora has launched One Rail, a new payment product that could help African businesses move and settle dollar-denominated funds across markets with fewer delays and lower infrastructure requirements.
One Rail integrates stablecoin payment and settlement options into Kora’s existing payment network. Eligible merchants in supported markets can accept payments in USDT and USDC, convert between supported assets, and settle funds into bank accounts, mobile wallets or stablecoin wallets.
Kora is rolling out the product in stages. Available functions will vary by market and the payment rails enabled for each merchant.
The move comes as African fintech infrastructure providers explore stablecoins as a way to improve cross-border payments.
For payment companies operating across several African markets, stablecoins can provide another way to move dollar-denominated value. If those balances can be converted into local currencies when required, companies may be able to reduce the amount of capital tied up in prefunded accounts.
The potential savings, however, depend on local liquidity, foreign exchange costs, conversion services and the availability of payout infrastructure.
One Rail brings stablecoins into existing payment infrastructure
One Rail is designed to allow businesses to use stablecoins without managing the underlying blockchain infrastructure themselves. Kora wants the process to operate like another payment method within its existing system.
Merchants do not need to manage separate wallets, blockchain infrastructure or reconciliation systems. They can receive USDT or USDC, monitor transactions through Kora’s dashboard and convert balances into supported local currencies when needed.
Kora founder and chief executive officer Dickson Nsofor said stablecoins could significantly reduce the time involved in some international transactions.
“If you go into your bank in Nigeria to do a wire to, say, China, it’s going to take you at least three days, the money goes from Nigeria to New York, from New York to Hong Kong, then from Hong Kong to mainland China,” Nsofor told TechCabal. “If you do the same transaction with a stablecoin, it’s less than two minutes end to end, at a fraction of the cost.”
Stablecoins can move between compatible blockchain wallets within minutes. However, the full cross-border payment process can still involve fiat conversion, FX transactions, compliance checks and local payout arrangements.
Kora currently operates in more than eight markets. These include Nigeria, Kenya, Ghana, South Africa, Egypt, Côte d’Ivoire, Cameroon and Tanzania.
The company said it still prefunds some markets where local liquidity is limited. Tanzania is one example. Kora launched there in April.
Stablecoins could give the company another way to manage that liquidity. Instead of holding large amounts of local currency across different markets, Kora could hold digital dollars and convert them when payments need to be made.
“Prefunding is still [a] fundamental way companies do business today,” Nsofor said. “That does not negate the fact that stablecoins will, in the future, be the best way to avoid prefunding altogether; you just hold a stablecoin, and based on the payment need, you convert. That’s where the whole world is tending.”
Growing interest in stablecoin settlement
Interest in stablecoins is growing as fintech companies look for ways to address the cost and complexity of cross-border payments.
The International Monetary Fund said Nigeria has accounted for roughly 60% of stablecoin inflows into Sub-Saharan Africa since 2019. US dollar-backed stablecoins also dominate the market, with about 99% of stablecoin market value denominated in US dollars.
The technology is also attracting attention from global financial institutions. The Bank for International Settlements identified funding costs and liquidity management as major challenges in cross-border multicurrency payments in 2022. It is now testing whether tokenised central bank reserves and commercial bank deposits could improve multicurrency settlement.
Other African fintechs are also investing in the model. In May, Tanzanian-founded remittance fintech NALA secured up to $50 million in debt funding from private credit firm Liquidity to prefund transfers, expand payment corridors and support larger enterprise clients. NALA has also been developing stablecoin payment infrastructure to support faster settlement and reduce FX costs.
Despite the growing interest, stablecoins remain a relatively small part of global commercial payments.
For Kora, One Rail is an attempt to bring the technology into the payment systems businesses already use.
“Cross-border commerce in Africa is hindered by high friction and remittance costs,” Nsofor said. “One Rail levels the playing field, enabling merchants to integrate stablecoin payments into their existing payment stack, delivering the speed, cost efficiency, and access needed to drive business growth across the continent.”
