AFRICA TECH SIGNAL — THE INFRASTRUCTURE HEISTAFRICA TECH SIGNAL — THE INFRASTRUCTURE HEIST
Article #7 | Part 6 of 8 · Africa Tech Signal | Vol. 13, 2026
Ali Mohammed
Chief Executive Officer @ Ramad Bridge LLC | Building Payment Corridors in East Africa
May 14, 2026
Let us start with a simple question. When a Nigerian moves their savings from naira to USDT to protect against inflation — who earns money from that decision?
Not the Nigerian. Not their bank. Not their government.
A private company called Tether earns it.
Here is how that works — in plain language.
WHAT IS SEIGNIORAGE?WHAT IS SEIGNIORAGE?
Seigniorage is the profit a government earns just from issuing money.
Here is the simple version: When a central bank prints a 1,000-naira note, it costs about 50 naira to produce. The government keeps the other 950. That 950-naira difference is seigniorage. It is quiet profit. It does not require collecting taxes or selling anything. It flows automatically from the fact that people use your currency.
The IMF estimates that seigniorage revenue averages about 1.0 to 1.5 percent of GDP every year across Africa. For countries already struggling to fund hospitals, schools, and roads — that is real money.
Now think about what happens when people stop using your currency.
The seigniorage does not disappear. It moves.
And right now, it is moving from African governments to Tether.
HOW TETHER COLLECTS AFRICA'S MONEYHOW TETHER COLLECTS AFRICA'S MONEY
Tether is a private company. It is registered in El Salvador. It issues a digital token called USDT that is pegged to the US dollar.
Here is the business model. You send Tether one dollar. Tether gives you one USDT. Tether takes your dollar and buys a US Treasury bill with it. Treasury bills earn interest — roughly 4 to 5 percent per year in recent years. Tether keeps all of that interest.
You hold the token. Tether holds the Treasury bill. Tether earns the yield.
In 2025, Tether reported $10 billion in net profit.
Ten billion dollars. From one private company. In one year.
And Tether has 500 million users globally. A large number of them are in Africa, Asia, and Latin America — places where local currencies are losing value and people need the dollar to protect their savings.
TETHER IS NOW THE 18TH LARGEST HOLDER OF US GOVERNMENT DEBTTETHER IS NOW THE 18TH LARGEST HOLDER OF US GOVERNMENT DEBT
This is the number that should stop every African finance minister in their tracks.
As of the end of 2025, Tether held $141 billion in US Treasury bills. That makes Tether the 18th largest holder of US government debt in the entire world.
Tether holds more US Treasuries than Germany. More than the United Arab Emirates. More than Australia.
This is a private company — with no elected government behind it, no central bank, no sovereign mandate — now outranking sovereign nations as a lender to the US government.
Where did that $141 billion come from?
From 500 million people switching out of their local currencies and into USDT.
From Nigerians protecting their savings from naira devaluation.
From Ethiopians hedging against birr volatility.
From Somalians moving remittances outside the banking system.
Every dollar that flows into USDT becomes a dollar that Tether uses to buy US Treasury bills. The interest on those bills — that is the seigniorage. And it flows from Africa to Tether to Washington.
The Center for Global Development said it directly in 2025:
"Part of the seigniorage revenue now generated in sub-Saharan Africa could flow to the US Treasury, further eroding the tax base of countries already struggling to finance development."
WHY THE US BENEFITS — AND DESIGNED IT THAT WAYWHY THE US BENEFITS — AND DESIGNED IT THAT WAY
This is not an accident.
In 2025, the United States passed the GENIUS Act — the first federal law creating a framework for stablecoins. The law requires that stablecoins be backed by high-quality liquid assets. That means US Treasury bills.
US Treasury Secretary Scott Bessent said publicly that stablecoins could drive at least $2 trillion in annual demand for US Treasury bills by 2030.
What the Secretary did not mention is where that $2 trillion comes from.
It comes from developing countries. From people protecting their savings from inflation in Nigeria, Ethiopia, Somalia, Ghana, and dozens of other nations.
Every person who switches from a local African currency to USDT is — without knowing it — helping fund the US government's budget at lower interest rates.
The IMF called this "the privatization of global seigniorage." A small number of private companies are collecting a profit that used to belong to sovereign governments.
Standard Chartered bank warned in 2025 that stablecoins could pull $1 trillion in deposits out of emerging market banks over the next three years. That is $1 trillion that would no longer support local African lending, local African businesses, or local African economies.
WHAT CAN AFRICA DO?WHAT CAN AFRICA DO?
The seigniorage story is the darkest part of the Infrastructure Heist. But it is not the end of the story.
Some countries are already building local answers.
Nigeria launched cNGN — a naira-backed stablecoin. If Nigerians use cNGN instead of USDT, the seigniorage stays in Nigeria. The Central Bank of Nigeria earns the yield. Not Tether.
Rwanda is building a regulatory sandbox that attracts fintech builders. Kenya passed legislation giving the Central Bank of Kenya oversight of stablecoin issuers.
The logic is the same as M-Pesa. East African telecoms did not just watch app companies take their revenue. Safaricom became the app. It built something its users preferred over the foreign alternative.
African central banks can do the same thing. But they need to move with the same speed their citizens are already moving.
Because right now, every day that passes without a local digital alternative, more seigniorage flows out of Africa.
And Tether's balance sheet grows larger.