Beyond the Dollar: How Local Stablecoins and Tokenization are Reimagining Global Liquidity

Stablecoins are emerging as the first true “killer app” of blockchain, shifting from speculative assets to critical financial infrastructure. Local currency stablecoins are gaining traction for domestic payments, while dollar-backed stablecoins remain the global reserve on-chain.

Disrupting the Remittance Modern Era

The rise of stablecoins marks a pivotal shift in digital finance, moving from speculative crypto assets to essential global infrastructure. While the broader blockchain market has often struggled to identify a “killer app,” stablecoins have achieved undeniable product-market fit by addressing a fundamental friction: the movement of value. By digitizing the dollar, these assets allow money to move with the speed and reliability of an email, rendering the slow, fragmented systems of traditional correspondent banking increasingly obsolete.

What defines the current era is the invisible integration of this technology. Stablecoins are no longer confined to niche trading platforms; they have become the backend rails for fintech apps, global payroll systems and neobanks. For the modern user, the underlying blockchain is irrelevant—what matters is that their money finally works the way the internet works. This transition into the infrastructure phase has been bolstered by landmark regulations, such as Europe’s MiCA and the GENIUS Act, providing the institutional certainty required to scale the market into the hundreds of billions of dollars.

One area where stablecoins are proving to be a genuine game-changer is remittances and cross-border payments. Despite being a multibillion-dollar industry, international transfers remain painfully slow and expensive in many regions. A recent International Monetary Fund study projected that stablecoin use—both as on-and off-ramps for crypto assets and for direct cross-border payments—will grow significantly in the coming years.

Sami Start, co-founder and CEO of Transak, highlights why stablecoins are uniquely positioned to disrupt this space:

The traditional cross-border system is slow, expensive, and crowded with intermediaries—each adding their own friction,” Start explains. “Many corridors still charge around 6% to move money, which makes little sense in a world where digital services move globally in seconds.

According to Start, this shift is driven by two primary advantages. First, stablecoins enable value chain compression; by converting local fiat into a stablecoin, money moves across chains instantly, and the middleman effectively disappears. Second, stablecoins introduce programmability to finance. Beyond simple speed, they allow money to behave like data, which simplifies complex operations such as global payroll, marketplace payouts and treasury management.

The Rise of Local Currency Stablecoins

While U.S. dollar-denominated assets account for the vast majority of tokens in circulation, a new trend is emerging in the form of local currency-backed stablecoins. For instance, a consortium of South African financial and fintech firms recently launched a stablecoin pegged to the rand, aimed at eliminating the delays and costs tied to traditional banking hours and cross-border trade.

Start notes that local stablecoins make sense for domestic payments because regulators, merchants and users in regions such as Nigeria may be more comfortable with a local unit of account.

“A fintech in Nigeria may prefer a local unit of account because regulators, merchants, and users are more comfortable with it. It reduces FX exposure for everyday transactions. There is a significant difference in on/off-ramping at a 1:1 rate or having to convert between local fiat and USD stablecoins, because of the effect of volatility on the fees and spread of the transaction,” Start explained.

However, Start insists that dollar-backed stablecoins will remain the global reserve asset on-chain. Rather than replacing the dollar, local stablecoins serve as tools for local liquidity. In the broader foreign exchange markets, stablecoins effectively tokenize currency pairs, allowing trading to mirror on-chain liquidity pools that are always on, global and operate with significantly tighter spreads.

Beyond Payments: The Next Breakthroughs

Beyond stablecoins, Start identifies other breakthrough moments for blockchain that are already underway, most notably the tokenization of real-world assets. Bonds, treasuries and money market funds are moving on-chain, and as settlement layers mature, Start expects equities, credit and more complex instruments to follow as large institutions continue their pilots.

Identity stands as the second major pillar of this evolution. Reusable know-your-customer protocols, attestations and compliance layers are projected to become industry standards. Start explains that mainstream financial products cannot be built on-chain without strong identity primitives, as these are essential for reducing fraud and protecting users.

Ultimately, stablecoins will serve as the rails upon which payroll, treasury, lending and investment products run. In this future, users will not think about the blockchain itself; they will simply experience financial products that are faster, cheaper and global by default.

FAQ ❓

• What are stablecoins? Stablecoins are digital tokens pegged to currencies like the U.S. dollar or local units, enabling fast and reliable money transfers worldwide.
• Why do stablecoins matter for Africa and emerging markets?

They cut remittance costs and delays, offering cheaper cross‑border payments in regions such as Nigeria and South Africa.

• Are local currency stablecoins gaining traction?

Yes, countries like South Africa are launching rand‑backed tokens to simplify domestic trade and reduce foreign exchange risk.

• Will the U.S. dollar remain dominant on-chain?

Dollar‑backed stablecoins continue to serve as the global reserve asset, while local tokens provide liquidity for regional economies.