Interesting… I reckon you’ve addressed a key issue which is a capital markets problem rather than a pure fx problem.
Now that stablecoins have solved the digitization of market access and liquidity on the fx spot via many more participants now than ever, we need tokenized risk transfer instruments to improve liquidity on the trade financing and risk management side… which is no doubt coming.
Why? Because it already exists informally - tokenizing it will simply reveal and make more efficient like it did for the fx and cash.
Problem with this glossy future: regulatory adoption + incumbents protection…
Very insightful Yoseph, with the different currencies in Africa, as we have the Dollar, would having a Continental Stable coin championed by the Africa Development bank or AU contribute to dollarization derisking while promoting inter Africa Trade while holding a continental stable coin in the reserves?
The idea of a continental stablecoin (like the EUR) seems appealing, but the level of coordination amongst multiple economies and currencies (that have different volatility levels) is extremely complex. I am less bullish on our capacity to execute that as a continent (not impossible). Hence alternative ways for intra-Africa trade seems more achievable with local stablecoins.
Interesting… I reckon you’ve addressed a key issue which is a capital markets problem rather than a pure fx problem.
Now that stablecoins have solved the digitization of market access and liquidity on the fx spot via many more participants now than ever, we need tokenized risk transfer instruments to improve liquidity on the trade financing and risk management side… which is no doubt coming.
Why? Because it already exists informally - tokenizing it will simply reveal and make more efficient like it did for the fx and cash.
Problem with this glossy future: regulatory adoption + incumbents protection…
Very insightful Yoseph, with the different currencies in Africa, as we have the Dollar, would having a Continental Stable coin championed by the Africa Development bank or AU contribute to dollarization derisking while promoting inter Africa Trade while holding a continental stable coin in the reserves?
The idea of a continental stablecoin (like the EUR) seems appealing, but the level of coordination amongst multiple economies and currencies (that have different volatility levels) is extremely complex. I am less bullish on our capacity to execute that as a continent (not impossible). Hence alternative ways for intra-Africa trade seems more achievable with local stablecoins.