Tether in Africa: Solar-Powered Kiosks and Stablecoin New Business Model

Author: Erik Hersman, founder of Gridless, an off-grid power system infrastructure company in Africa

Compiled by: DeepTech TechFlow

Two days ago, Tether's CEO Paolo Ardoino announced their new plan on Twitter: to promote solar kiosks in Africa. Currently, there are already hundreds of solar kiosks in operation, providing monthly subscription services for high-performance batteries, and users can pay with USDt and Bitcoin. Tether plans to expand this model to 100,000 solar kiosks, promoting the electrification of the African continent.

My first reaction to this is that this is a very meaningful attempt. As I mentioned in a recent article on the potential of off-grid energy in Africa, innovative energy solutions are key to driving Africa's development. The electrification of the African continent is not a zero-sum game, and there is no single solution that can completely address the electrification challenges of the African continent. Currently, as many as 600 million people in Africa lack access to electricity, accounting for 83% of the global population without electricity. Therefore, exploring new off-grid energy models is the inevitable direction for the future.

I fully agree with Paolo's point of view, Tether is a rare enterprise in a century. In 2024 alone, Tether's profit reached as high as 13.7 billion U.S. dollars. The usage of Tether continues to grow in the United States, the European Union, and China, and at the same time, the demand for USDt in developing countries is also rapidly increasing. As some local currencies in certain regions depreciate, people are increasingly inclined to use stablecoins (digital tokens pegged to legal tender such as the US dollar) to hedge economic risks. Taking Ethiopia as an example (with a population of about 123 million), its currency, the birr, depreciated by about 30% in the middle of 2023. Now, Ethiopia has become the fastest-growing stablecoin market in Africa, with a 180% year-on-year increase in retail stablecoin trading volume.

(Note: Due to the lack of detailed information currently available, some analysis of the Tether model in this article is based on speculation.)

Re-examine the solar pavilion in Africa

Tether's plan in Africa combines off-grid solar kiosks with stablecoin-based financial services, the latter being a new highlight in this model. Before delving into a more in-depth discussion, we need to first understand the background of this field.

Over the past 15 years, many solar kiosk projects provided by commercial companies and non-governmental organizations have emerged on the African continent. The operation modes and success factors of these projects provide important references for evaluating Tether's plan, for example:

Solar Kiosk (2011-2019): Operating in Ethiopia, Kenya, Botswana, Tanzania, Rwanda, and Ghana, with up to 250 solar kiosks at peak times.

ARED “Shiriki Hubs” ( is ongoing ): covering Uganda and Rwanda, currently with 60 solar kiosks.

Community Energy Kiosks (: Belongs to the Malawi SOGERV project, with a small scale, only 4-10 solar kiosks.

Many solar pavilion projects in Africa face challenges in profitability and organic growth, often relying on subsidies or funding provided by impact investors to operate. The business model of Tether is currently uncertain. It is believed that Tether is likely to adopt a franchise business model. However, regardless of the model Tether chooses, there are several points that need special attention:

The source of funding determines success or failure

Tether's plan is supported by a highly profitable for-profit company, which has laid a solid foundation for the success of the project. In contrast, the financing model relying on subsidies, especially in the 'post-USAID era' in Africa, is difficult to support the long-term expansion of enterprises. Socially responsible investment can only provide assistance in the early stage, but to achieve large-scale deployment, it still requires strong capital partners to invest a large amount of funds.

Providing more community services is key

If solar kiosks are only used as low-profit battery charging stations, local operators often find it difficult to obtain sufficient profits. In order for solar kiosks to achieve sustainable operation, they usually become the social center of the community, providing additional functions such as WiFi, mobile payment services, phone charging, and mobile top-up sales to the community. If solar energy can also be used to provide a place for villages to watch football matches at night, it often attracts more popularity and further enhances profitability.

Tether's solar pavilion plan has a good starting point: stable source of funds, secure growth financing. Moreover, as franchisees are usually mobile payment agents, they only need to support USDt stablecoin as a payment option to smoothly operate the subscription service model. At the same time, the solar pavilion also comes with WiFi deployment capabilities, providing the community with additional value-added services, further enhancing the attractiveness and practicality of the project.

However, expanding in the rural markets of Africa is not easy. The 'last mile' market faces significant logistics and operational challenges, while the competition in the off-grid solar sector is also extremely fierce. The pay-as-you-go household solar financing model has been developed for 13 years, but many companies have failed due to underestimating the competitive environment and logistical complexity of the African market. In addition, the risks of theft and damage, as well as the difficulty of building brand trust in a low-trust society, are also key issues that cannot be ignored.

The Rise of Stablecoins in Africa

In recent years, Africa has become a major growth area for the use of cryptocurrencies, with stablecoins being particularly popular. By mid-2024, approximately 43% of the total value of cryptocurrency transactions in sub-Saharan Africa comes from stablecoins. The rapid growth of this proportion reflects concerns about the instability of local currencies. In fact, in Africa, stablecoins are even more popular than Bitcoin, becoming the primary tool for transferring value. This trend indicates that stablecoins are becoming an important part of Africa's financial ecosystem.

Stablecoins (such as USDt) have demonstrated very practical use cases in the African economy. A typical application scenario is cross-border trade and payments. Many small and medium-sized enterprises choose stablecoins for cross-border payments because it is difficult for them to obtain USD accounts. These enterprises can exchange local currency for USDt and complete international transfers within minutes, while the recipients can quickly convert it into hard currency. This approach greatly optimizes the traditional cross-border payment process. Compared to waiting for weeks for high bank transfer fees, or relying on high-risk black market foreign exchange, the use of USDt bypasses traditional intermediaries and high remittance fees, becoming an indispensable tool for many import and export companies. Stablecoins are changing the trade landscape in Africa. In addition, the practical role of stablecoins is also reflected in daily transactions such as paying overseas tuition fees and purchasing inventory. The widespread use of stablecoins addresses many pain points in traditional financial systems, such as the high cost and delays of cross-border payments, and therefore performs well in the African market, becoming an important part of the African cryptocurrency ecosystem.

However, the popularity of stablecoins also faces challenges from government regulatory agencies. Some countries are concerned that the widespread use of USDT may lead to capital outflows and weaken the stability of the local currency. This is particularly evident in certain countries, such as Malawi and Nigeria. Due to severe depreciation of the currencies in these countries, many people are more inclined to choose USDt to meet domestic and international payment needs, further weakening the attractiveness of the local currency. Currently, stablecoins are still in a "gray area" in Africa: they are widely used informally but have not yet received official recognition. This status poses obstacles to large-scale integration. Companies may be reluctant to openly use USDT for fear of future government penalties, while fintech startups need to confront the challenge of lacking a clear regulatory framework.

We have reason to believe that Tether can perform well in the African market. Tether's strong financial strength gives it a competitive advantage in the African market. This financial support has opened many doors of opportunities for it. In addition, Tether's strategy is to expand the use of stablecoins from urban traders to rural areas. For merchants who extend their commodity supply chains to rural areas, they have long been using USDt in transactions with counterparts in China and other international markets, so replicating this pattern in the local market is a logical step. In this way, Tether is expected to further promote the popularization of stablecoins in Africa and provide convenient financial services to users in more regions.

Tether's solar pavilion project is expected to succeed

One of the most innovative aspects of Tether's plan is to integrate stablecoin payments and related financial services into the operation mode of solar pavilions. This model may not only change the industry landscape but also face certain challenges.

On the one hand, stablecoins are gradually becoming popular among grassroots users in Africa due to their ability to effectively address real financial issues. If Tether can extend the application of stablecoins to physical solar panels in rural areas, this will further promote financial inclusion. Imagine a farmer not only being able to charge his phone at a solar panel, but also being able to convert some of his cash income into digital USDt balance. This balance not only helps farmers combat local currency inflation, but also provides them with a more stable way to store value. They can use these balances to purchase agricultural supplies, or receive remittances from foreign relatives within minutes.

In theory, this solar pavilion is not only an energy supply center but also a 'informal micro-bank' that provides support for those who cannot access traditional banking services. By combining energy supply with financial technology, this model may significantly enhance the overall development level of the community—solving both the electricity demand and providing a safer way for savings and transactions. Compared to traditional solar pavilion projects, Tether's innovation lies in introducing financial service functions, rather than just providing energy and connectivity services.

From a business perspective, this model has strong sustainability and the potential to be profitable. However, the goals of this project may not be limited to profit-seeking. Tether's strategy appears to include expanding the use of stablecoins, as well as establishing brand influence and a good reputation in emerging markets. Against the backdrop of increasing regulatory pressure in the US and the EU, Tether is turning its focus to the southern hemisphere to explore new growth opportunities. This strategy suggests that Tether may be willing to endure some losses in the early stages of the solar pavilion project in order to gradually build a complete ecosystem. This approach is similar to the development path of Mpesa in Kenya: through long-term investment and patient market cultivation, achieving widespread user acceptance and commercial success in the end.

Compare Tether mode with Gridless mode

As another company committed to providing innovative financing models for Africa, developing off-grid energy, and truly achieving profitability, Gridless's model differs significantly from Tether's. Here is a comparison of the two models:

Tether's plan is to provide flexible payment options and educational services to African communities by deploying solar-powered kiosks. Gridless, on the other hand, focuses on building low-cost hydroelectric power stations in regions with natural water resources, while using surplus electricity for Bitcoin mining to provide stable financial support for the project.

Financing method

Gridless Mode: Obtain financing by using Bitcoin as collateral to drive project expansion.

Tether mode: relying on its large reserve fund to invest directly in projects, achieving rapid growth.

Energy Source

Gridless mode: Using hydropower, relying on the low cost and sustainability of water resources.

Tether mode: relying on solar power generation, fully utilizing abundant and low-cost solar energy resources.

Source of Income

Gridless mode: Profit is achieved through bitcoin mining and meeting the community's electricity needs.

Tether model: Profit from the payment function of USDt (or Bitcoin), and may earn income through managing floating funds, or attract users to use other financial services provided by Tether.

Growth potential

Gridless mode: Although limited by the geographical conditions of hydroelectric power generation, it can provide localized and more stable energy solutions for the community, while achieving intrinsic financial sustainability through bitcoin mining.

Tether mode: With its strong financial strength and standardized solar pavilion design, it can expand the market more quickly. However, this model may face regulatory obstacles related to cryptocurrencies, and there is also a certain complexity in managing a large number of physical sites.

It can be seen that these two models demonstrate strong innovation in combining renewable energy and cryptocurrency, but the application scenarios are slightly different. Tether's solar kiosk can quickly cover areas with insufficient service, especially suitable for regions rich in solar resources but limited by traditional grid expansion. While Gridless' hydropower deployment model has a longer deployment cycle, it provides a solution that focuses more on infrastructure construction. This model can provide communities with lasting and stable power supply, better supporting the long-term development and economic growth of communities.

In an ideal scenario, a hybrid approach can be adopted. For example, deploying solar kiosks in areas where hydroelectric power is not feasible to fill the gaps in energy supply. In this way, the overall impact of electrifying off-grid Africa can be maximized, providing reliable energy support to more communities while achieving sustainable development goals.

Distribution map of hydropower, solar power, and wind power in Africa

As shown in the figure above, although there is some overlap between solar and hydroelectric power generation in certain areas, there are also large areas that are more suitable for one of the energy forms. Tether's solar pavilions are mainly aimed at areas with abundant sunlight but lacking in power grid, such as the Sahel region and the Horn of Africa. These regions are characterized by high-intensity solar radiation and limited hydroelectric power potential, making them very suitable for modular design and rapid deployment of solar pavilions. These pavilions not only provide electricity, but also provide local residents with internet access and financial services. Gridless, on the other hand, focuses on regions with abundant water resources such as East Africa and Southern Africa, building small-scale hydroelectric power stations. The river flow in these areas is stable and can support uninterrupted power supply 24 hours a day.