Frontier Fintech GPS# 33 - May 21st 2025
JP Morgan's Kinexyx partners with Ondo and Chainlink, US Faster Payments releases guidelines on Aliases, Kenyan MPs raise issues around cashless transactions and other stories that matter
Illustration by Mary Mogoi
Hi All, Welcome to the 33rd edition of Frontier Fintech GPS where I provide key insights on the top global Fintech news items that matter to you. This newsletter will be arriving in your inboxes every Wednesday morning. The idea behind Frontier Fintech GPS is to help you navigate the endless stream of Fintech news and get smart about global Fintech as it applies to Africa. To those who are yet to subscribe, hit the subscribe button below and share with your colleagues and friends. 🚀
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🌍 Chainlink, J.P. Morgan’s Kinexys, and Ondo Finance Test New Way to Connect Banks with Blockchain
Chainlink, Kinexys (a J.P. Morgan spinout), and Ondo Finance have successfully tested a new way to settle payments for real-world assets on the blockchain. Their goal? To let traditional bank payment systems work seamlessly with modern blockchain-based assets.
Here’s what they did:
Ondo Finance provided a tokenized version of short-term U.S. Treasury bonds
Kinexys handled the cash payment part on a secure, private blockchain
Chainlink acted as the bridge, making sure the asset and payment were exchanged instantly and securely across different systems (known as “Delivery versus Payment” or DvP)
This test shows that it’s possible to combine old-school bank systems with new blockchain platforms; helping speed up transactions, reduce risk, and cut out the delays and errors that happen with today’s slow, manual financial systems.
I’ve been keeping track of JP Morgan and Kinexys for sometime as readers of this newsletter would attest. This interest is based on two insights; Crypto will become mainstream and banks will play a key role in making it mainstream. What JP Morgan have done well is to spend time understanding the technology, building their competencies around it and importantly, applying it in areas where there’s a real problem to be solved; Payments, Custody and Tokenisation. This ties in with another story in this edition where the Paypal Crypto head talks of a big role for banks to play in Stablecoin adoption.
🇺🇸U.S. Faster Payments Council Releases Guide for Open Alias Directory
The U.S. Faster Payments Council (FPC) published a report titled "Decision Points for an Open Alias Directory" from its Directory Models Work Group. The guide outlines considerations for developing an open, alias-based directory service to simplify and accelerate faster payments in the U.S. It covers architectural frameworks, implementation models, and key decisions, such as alias types, ownership verification, and query structures. This resource aims to enhance payment efficiency and accessibility. The initiative supports the FPC’s mission to advance secure and user-friendly faster payment systems, potentially streamlining transactions and fostering innovation in the U.S. financial sector.
Pix runs on an in-built Alias system and UPI runs on Aadhar which is embedded identity. National payment systems that have achieved scale always embed identity with settlements. The popularity of MoMo over bank accounts is built on this insight, a phone number is a more intuitive aspect of identity than a bank account number. For US Faster Payments to gain traction, aliases will be critical. Nonetheless, it’s interesting to see such moves happen at the same time as the Genius Act coming to be. In my view stablecoins adoption and Faster Payments adoption are somewhat exclusive. The in-country stablecoin use case for ordinary citizens is not strong if a regulated faster payments system exists and is gaining adoption.
🇰🇪 Proposed Law to Mandate Cash Acceptance for Transactions Under Ksh100,000 (US$ 775)
The Central Bank of Kenya (Amendment) Bill, 2025, sponsored by Suba South MP Caroli Omondi, seeks to mandate cash acceptance for transactions under KES 100,000 ($775) at physical businesses. The bill aims to protect Kenyans, particularly the elderly and rural residents, who face challenges with digital payments due to limited access or familiarity. It addresses financial exclusion in Kenya’s rapidly digitizing economy, where mobile money and card payments dominate. The proposed law could require businesses to adjust operations, potentially increasing costs to maintain cash handling systems. It may conflict with the government’s push for digital payments, as seen in the e-Citizen platform, and could impact the projected $14.5 billion digital payments market by 2028.
This move shows the difficult elements of digitisation and building cashless societies. The impetus to retain cash is based on the fact that cash is the most inclusive payments method ever. It’s easy to use and promises settlement finality which is critical for groups such as the elderly and illiterate. China’s CBDC tries to solve this by embedding off-line wallets but it still doesn’t match cash for those specific features. The logic behind the bill is clear and its up to the industry at large to keep innovating so as to make digital payments as easy and secure as cash.
🇳🇬 Opera Launches Standalone Stablecoin Wallet 'MiniPay’
Opera Limited, a key investor in African fintech OPay, has introduced MiniPay, a standalone stablecoin wallet targeting African users. Previously integrated within the Opera Mini browser, MiniPay is now available as a lightweight app on iOS and Android platforms. The wallet supports stablecoins such as USDT, USDC, and cUSD, facilitating instant peer-to-peer transactions with fees below $0.01. Since its soft launch in December 2024, the app has garnered over 500,000 downloads and is experiencing rapid growth in Nigeria and Kenya. This development aligns with the increasing demand for stable, dollar-pegged digital assets in Africa, where stablecoins now account for approximately 43% of all crypto transaction volume in Sub-Saharan Africa, surpassing Bitcoin's share. While Opera has not announced integration plans with OPay, the fintech's existing infrastructure positions it as a potential partner for facilitating cash-in and cash-out operations.
In a recent podcast episode, Nicolai Eddy of Nala walked me through what he considers a massive use-case for Stablecoins. In his view, Stablecoin adoption can scale if MoMo’s like M-Pesa and MTN adopt them. This is a view I share and even discussed with a member from the M-Pesa Africa team. Besides, MoMo was the original stablecoin. A USD stablecoin on a MoMo like product solves cross-border payments within the continent very easily. If M-Pesa had a USD wallet, then trade payments between Kenya, Uganda and Nigeria would be seamless. MiniPay understands this and their tie in with OPay’s ability to provide Cash In Cash Out services could be useful.
🌍 Flour Mills Invests in OmniRetail to Strengthen Distribution and Expand Regionally
Flour Mills of Nigeria (FMN), a 64-year-old manufacturing giant, co-invested $20 million in OmniRetail, a B2B e-commerce startup, transitioning from a customer to a shareholder. OmniRetail connects 145 manufacturers, including FMN, to 150,000 retailers via an asset-light network, offering real-time data and collateral-free financing. The investment, part of a round co-led by Norfund and Timon Capital, supports OmniRetail’s expansion in Nigeria, Ghana, and Ivory Coast. FMN aims to digitize its distribution channels and enhance retail intelligence, aligning with its strategy to go private and expand pan-African operations. This move strengthens FMN’s supply chain efficiency and positions OmniRetail to dominate Africa’s retail infrastructure, leveraging its $120.15 million revenue and profitability in 2023.
Whilst there are definitely synergies between Flour Mills of Nigeria and OmniRetail, with the former being an anchor client, I think this transaction reflects something more fundamental. In my most recent article, I talked about how African family wealth can be leveraged to grow Fintech in Africa. One of the arguments I made revolved around the growth and scale of some of these Fintech Startups. OmniRetail for instance does north of US$120 million which is 10% of Flour Mills of Nigeria’s revenue. Moreover, it’s scaling at a 730% CAGR over 3 years. Besides the synergies, it simply makes business sense. Some of these scale-ups are offering growth opportunities that simply may not exist for some of these incumbent players. I expect to see such transactions where old capital meets new tech-powered entrepreneurship. Watu Credit is a good example given Car and General’s involvement in the business. They enable traditional businesses to expand their geographical footprint and diversify their revenue profile.
🇺🇸 Microsoft CEO Champions Human Leadership in the AI Era
Microsoft CEO Satya Nadella stated that AI advancements increase the need for human leadership with qualities like clarity in ambiguous situations, rather than reducing workforce needs. Speaking to Semafor before the Microsoft Build conference, he noted that up to 30% of Microsoft’s software is now AI-generated, yet the company plans to hire more software engineers. CTO Kevin Scott highlighted the demand for employees with broader perspectives, understanding social systems and human behavior. This shift supports Microsoft’s adaptation to an AI-driven landscape, enhancing productivity in knowledge work. The focus on human skills aims to maintain Microsoft’s competitive edge in the $3.4 trillion company’s AI strategy.
This is an important note for African business leaders. The African education system has largely focused on producing executional talent for either government or industry. Critical thinking or even independent thinking has never been a priority. As AI replaces mundane tasks, then this kind of multi-dimensional thinking becomes ever important for businesses. Leaders should invest in identifying such people and training the remaining workforce on critical thought. It will become an increasingly important element for career success.
🇺🇸 Senate Advances GENIUS Act to Regulate Stablecoins
The U.S. Senate voted 66-32 to advance the GENIUS Act, establishing the first regulatory framework for stablecoins, digital tokens pegged to fiat currencies like the U.S. dollar. The bipartisan vote, supported by 16 Democrats and most Republicans, followed a failed attempt two weeks earlier when Democrats blocked the bill. An amendment addressing consumer protections, limits on tech companies issuing stablecoins, and ethics standards for special government employees secured Democratic support. The bill aims to provide regulatory clarity, protect consumers, and keep innovation in the U.S. Its passage could enhance payment efficiency but faces uncertainty in the House, where a different stablecoin bill exists.
The GENIUS Act is meant to drive regulatory clarity around Stablecoins particularly in the US. It’s an Act that’s primarily focused on issuers i.e. companies that issue their own Stablecoins like Paypal and PyUSD. Some things stick out;
It bans yield bearing stablecoins which should weaken its custodial value;
It clarifies that Payment Stablecoins are not securities and therefore shouldn’t be regulated as such. This is critical for the industry. Regulating it as a payment method eliminates the risk of undue taxation, an issue we discussed in our latest podcast episode;
It gives clarity on who can issue and KYC/AML rules for issuers.
With such clarity, banks are expected to be more comfortable launching their own Stablecoins. It could open an avenue for big payment banks like Citi to use their own stablecoins or tokenised deposits for cross-border settlement. Nonetheless, with the Trump’s family’s involvement in Crypto, its impossible to escape the obvious conflict of interest.
🇺🇸 PayPal Emphasizes Banking Partnerships to Advance Stablecoin Adoption
At Consensus 2025 in Toronto, PayPal’s Senior Vice President of Digital Currencies, Jose Fernandez da Ponte, emphasized that banks are essential for stablecoin success, providing critical infrastructure like custody and fiat rails to scale beyond crypto-native users. MoneyGram CEO Anthony Soohoo noted that U.S. stablecoin legislation would boost trust and adoption. The executives discussed stablecoins’ real-world utility, such as streamlining corporate treasury and cross-border payments, citing examples like ten-minute transfers to the Philippines and Africa. Clear regulation is expected to spur new issuers, followed by market consolidation. The $230 billion stablecoin market, dominated by Tether’s USDT and Circle’s USDC, could grow to $2 trillion by 2028 with regulatory clarity, enhancing payment efficiency and financial inclusion.
Again, further validation that banks will have a role to play in the Stablecoin industry, a move more likely given that the GENIUS Act has now passed. The volumes are growing. The Co-Founder of Verto, in a LinkedIn post suggested that they expect to do US$ 1b in monthly volumes by year end. It’s becoming inescapable.
🇳🇬 Central Bank Holds Benchmark Interest Rate at 27.50%
The Central Bank of Nigeria (CBN) held its benchmark interest rate steady at 27.50% during its Monetary Policy Committee (MPC) meeting, marking the second consecutive meeting without a change. The decision, announced by Governor Olayemi Cardoso, reflects a cautious approach to balance inflation control with economic growth. The MPC noted improvements in exchange rate stability, a slowdown in fuel price increases, and moderation in food inflation, driven by government measures to boost food supply and security. Headline inflation was reported at 23.71% in April 2025. The decision aims to sustain foreign investment inflows and maintain price stability, but high borrowing costs may continue to challenge businesses. The next MPC meeting is scheduled for July 21–22, 2025.
Nigeria has had an extraordinarily aggressive monetary policy stance over the last year. Their policy rate is at 27.5% from an average of 12-14% over the last 10 years, reflecting a doubling of this rate. Moreover, their Cash Reserve Ratio which reflects what percentage of deposits banks are meant to keep with the Central Bank, stands at 50%. For context, the rate in South Africa is 2.5% and in Kenya its slightly above 4%. Simply, Nigerian banks are hampered in their ability to lend to the economy. It probably explains the growth of digital credit and private credit arrangements in Nigeria. It also shows the challenges that the likes of Moniepoint will have in treasury management as they transition to commercial banks.
🌍 MTN's BankTech Disburses Record $592M in Q1 Loans
BankTech, the digital lending arm of MTN’s Mobile Money unit, disbursed a record $592 million in loans in Q1 2025, the highest since its launch in August 2023, according to MTN Group’s financial reports. The loans, primarily issued to individuals and small businesses, reflect surging demand for microloans in Ghana, Uganda, and Cameroon, where BankTech’s banking-as-a-service platform thrives. Nigeria, MTN’s largest market, lags due to Central Bank of Nigeria restrictions on Payment Service Banks offering credit. The platform’s growth highlights telecoms’ role in addressing Africa’s credit gap, enhancing financial inclusion. BankTech’s APIs enable fintechs and businesses to integrate lending, savings, and insurance, driving scalability and efficiency in underserved markets
This reflects a growing trend in the credit ecosystem in Africa. Loop by NCBA recorded around US$ 8b in total disbursements led by Fuliza and M-Shwari which are managed in partnership with M-Pesa by Safaricom.