Dollar Resilience, Stablecoin Rise Shape Future

Global interest in de-dollarization has grown, but tangible progress remains limited due to political and strategic constraints. VALR co-founder Badi Sudhakaran argues that USD-based stablecoins may prove more effective than the AU initiative known as PAPSS for cross-border payments.

Dollar’s Enduring Appeal Challenges De-Dollarization Efforts

In recent years, the discourse surrounding de-dollarization has intensified, capturing significant global mindshare as nations explore alternatives to the U.S. dollar’s pervasive dominance in international trade and finance. Beyond the heightened rhetoric, however, tangible progress toward this objective has remained largely limited.

This stagnation can be attributed to a confluence of factors, chief among them being U.S. President Donald Trump’s explicit threats to impose punitive measures on countries that actively encourage others to abandon the dollar. Major economic blocs like BRICS, despite frequently teasing the concept of launching an alternative reserve currency, have effectively balked at committing to such a complex undertaking.

Similarly, China, whose yuan is arguably the most strategically positioned currency to challenge the dollar’s hegemony, has thus far resisted the temptation to fully internationalize its currency, preferring to maintain a degree of capital control for its own economic stability. This collective hesitancy among potential challengers has left the African Union (AU) as a singular, proactive force in actually proceeding with concrete efforts to diminish the dollar’s role.

As widely reported by various media outlets earlier this year, the AU’s payments platform, the Pan-African Payment and Settlement System (PAPSS), launched the African Currency Marketplace (ACM). This platform aims to create a dollar-free transactional environment across the continent. While the ACM has been widely lauded as an important step in the right direction for intra-African trade and financial sovereignty, some observers remain cautiously optimistic.

They contend that the mere launch of the marketplace provides no immediate guarantee that traders will swiftly abandon deeply ingrained dollar-based payment systems in favor of the newly introduced ACM, citing the immense network effects and established liquidity of the greenback. Badi Sudhakaran, co-founder and chief product officer (CPO) at the Africa-focused crypto exchange VALR, concurs with the observers’ sentiments, adding that preference for the greenback is not solely linked to the performance of local currencies.

“Despite de-dollarization rhetoric, most people and institutions still view the dollar as king and a safe haven asset compared to their local African currencies. This isn’t just sentiment—it’s based on decades of relative stability and global acceptance. Even when African currencies are performing well, the dollar remains the preferred unit of account for international trade and value storage,” Sudhakaran said.

Noting the U.S. President’s stance on de-dollarization, the VALR co-founder also warned that proceeding with this initiative may “create political risks” for the AU member states.

Stablecoins Emerge as a Viable Digital Alternative

However, Sudhakaran pointed to dollar-based stablecoins and their growing acceptance as a factor likely to impede the ACM project. In fact, Sudhakaran argued that “institutions are already using stablecoins for the very same cross-border settlement purposes that PAPSS is designed to address.” Furthermore, stablecoins are said to combine the stability of the dollar with the efficiency of digital assets, all “without the currency risk of direct African currency pairs.”

Therefore, while there is validity in the African continent’s desire to proceed with PAPSS, the reality, according to Sudhakaran, is that “digital assets and stablecoins provide a more viable path to achieving those goals.” This inevitably creates opportunities for platforms like VALR.

Meanwhile, Sudhakaran offered his thoughts on assertions recently made by BitMEX founder Arthur Hayes concerning the penetration of stablecoins in Nigeria, Africa’s most populous nation. As reported by Bitcoin.com News, Hayes claimed that a U.S. banking executive had told him that one-third of Nigeria’s entire gross domestic product (GDP) now flows through USDT.

Like many observers, Sudhakaran believes it difficult to corroborate this claim given the decentralized nature of transactions involving these stablecoins. However, the VALR co-founder told Bitcoin.com News that the conditions giving rise to the adoption or usage of stablecoins validate the belief that a significant portion of transactions in Nigeria, and indeed in much of Africa, are being settled with these digital assets.

“What I can tell you is that the underlying trend is undeniably real. Africa has emerged as the world’s largest beneficiary of USD-based stablecoins, and the drivers are clear: currency instability, the need for inflation hedging, and the critical requirement for efficient cross-border payments,” Sudhakaran argued.

To support this argument, Sudhakaran highlighted the fact that stablecoins now account for 40% of VALR’s overall crypto transaction volumes. Furthermore, VALR has become a global top 10 minter of the stablecoin USDC, a feat which he says “reflects not just South African demand but broader African adoption patterns.”

Interest in stablecoins and cryptocurrencies in general has garnered the attention of global exchanges. However, despite targeting African users, many of the global exchanges appear reluctant to set up bases on the continent. While there is an abundance of theories explaining why this is the case, Sudhakaran told Bitcoin.com News that this could be a resource allocation issue.

“Their reluctance makes sense from a resource allocation perspective—navigating 54 different countries, each with disparate financial systems and varying levels of regulatory clarity, requires significant investment in both capital and expertise,” the VALR co-founder explained.

Sudhakaran also elaborated that building crypto businesses in Africa presents genuine difficulties due to inconsistent regulatory frameworks across the continent. Beyond regulation, operational complexities require deep local knowledge of payment systems, compliance requirements, and market dynamics that differ dramatically from one country to another.

He also emphasized that some of these exchanges may not fully appreciate the fact that many Africans utilize crypto out of necessity—for remittances, currency hedging, and preserving value in unstable economic environments—rather than primarily for speculation. This fundamental distinction, he argued, creates a user base that is often more long-term and engaged, relying on crypto for essential financial needs.

Therefore, rather than attempting to navigate these complexities alone, Sudhakaran encouraged global exchanges seeking to tap the African market to consider partnering with locally established exchanges.

“Rather than trying to navigate these complexities alone, there’s a much more pragmatic approach. We welcome global crypto firms to engage with VALR and partner with us to access this customer base effectively. We’ve already done the heavy lifting of regulatory navigation, local integration, and market research, particularly in South Africa,” the co-founder stated.