Weekend Read: Stablecoins Can Move Money Faster but Cannot Build Trust

By Tinotenda Bhunu

HARARE – THE next currency debate in Zimbabwe may not begin at the Reserve Bank of Zimbabwe or in Parliament. It may begin on a smartphone.

A graphic designer in Harare finishes work for a client in London. A software developer in Bulawayo completes a project for a company in Johannesburg. A nurse in the diaspora sends money home for school fees. A small trader wants to settle an invoice with a supplier across the border.

The work is done. The goods may already have been delivered. The money exists. But moving it from one person to another can become an economic project of its own banks, correspondent banks, exchange rates, fees, compliance requirements, settlement delays, and the quiet uncertainty over which currency will ultimately arrive at the other end.

This is where stablecoins enter the conversation.

Stablecoins are digital assets designed to hold a steady value against an underlying asset, most commonly the US dollar. Unlike Bitcoin, whose price can swing violently within hours, a dollar-backed stablecoin attempts to behave like a digital dollar. The attraction is obvious: if money can cross borders almost as easily as sending a message, some of the costs of participating in the international economy may fall.

But Zimbabwe should be careful. The question is not whether stablecoins are clever technology. The question is whether they solve an economic problem or merely move it somewhere else.

The Payment Problem Is Real

Zimbabweans do not need a lecture on monetary uncertainty. They have lived through it.

Currency changes, exchange-rate movements, and the gap between official and parallel-market rates have made the choice of currency more than an accounting question. It can determine the value of a salary, the price of stock, and whether a business can replace what it has sold.

In such an environment, people naturally search for instruments that preserve value and reduce uncertainty. This is not a failure of human behaviour. It is an economic response to incentives. When the official system is expensive, slow, or uncertain, people look for alternatives.

That principle matters when thinking about stablecoins.

A Zimbabwean digital entrepreneur may not be interested in cryptocurrency because he wants to speculate. He may simply want to be paid. A family receiving a remittance may not care about blockchain technology. They may simply want the money to arrive quickly and retain its value.

The economic value of stablecoins may not lie in replacing money altogether. It may lie in reducing the friction involved in moving money.

And the friction is substantial. According to the World Bank, the average cost of sending remittances to Sub-Saharan Africa remains around 8 percent, far above the global average and more than three times the Sustainable Development Goal target of 3 percent. For a family receiving $200 a month, that is roughly $16 lost to intermediaries every time. Over a year, it is nearly a month’s worth of school fees.

A cheaper, faster settlement mechanism could therefore have real welfare effects. That is not a small thing.

What the Blockchain Cannot Do

There is, however, a temptation in discussions about financial technology to confuse a payment problem with an economic problem. They are not the same.

The World Trade Organization’s work on stablecoins and international trade points to an important distinction: stablecoins may improve payments and settlement, but they do not replace trade finance. This is crucial for Zimbabwe.

Suppose a Zimbabwean manufacturer wants to import machinery. Being able to send the supplier a stablecoin in thirty seconds does not solve the entire transaction. Someone still has to finance the machinery. Someone has to insure it. Someone has to transport it. Customs documentation still has to be completed. The supplier must trust the buyer. The buyer must trust the supplier. The machinery must eventually arrive. And the business must have the productive capacity to generate enough income to justify the investment.

A faster payment is useful. But faster payment is not the same thing as economic development.

This is where much of the cryptocurrency debate goes wrong. Technology can reduce transaction costs. It cannot repeal economic reality.

A blockchain can record ownership. It cannot create ownership where the law does not protect it. A stablecoin can transfer value. It cannot create value. A digital wallet can make payment easier. It cannot make an unproductive business productive. And no token can substitute for trust in contracts, property rights, institutions, and the rule of law.

Zimbabwe’s Digital Dollar Dilemma

There is another question Zimbabwe cannot escape: what happens when the digital dollar becomes easier to use than the domestic currency?

This is where stablecoins become more than a payment innovation. They become a monetary question.

Most major stablecoins are linked to the US dollar. If their use expands in Zimbabwe, they could deepen digital dollarisation. From the perspective of an individual, this may make perfect sense. If a person wants to preserve purchasing power, receive payment from abroad, or settle an international transaction, a dollar-linked digital asset may appear more attractive than an unstable local unit.

But what makes sense for an individual may create difficulties for the monetary authorities. If economic activity increasingly takes place through foreign-currency stablecoins, demand for domestic currency may weaken further. The central bank may have less influence over the payments ecosystem. Part of the country’s monetary infrastructure could effectively be controlled by entities outside Zimbabwe.

This is not an argument that stablecoins should automatically be prohibited. It is an argument for asking the right questions.

Who issues the stablecoin? What exactly backs it? Where are the reserves? Who owns them? Can users redeem their tokens at par? What happens when redemption is suspended? What happens when an issuer faces a regulatory action in another country? And who bears the loss when the promise behind the digital dollar fails?

The word stable should not be mistaken for a guarantee. Stability is a property that must be supported by assets, institutions, governance, and credible redemption mechanisms.

The history of private money in Zimbabwe is instructive here. Bearer cheques, bond notes, and now the gold-backed ZiG have all attempted to solve a confidence problem with a technical fix. None has fully succeeded, because the problem was never purely technical.

The Zimbabwean Opportunity

There are nevertheless areas where stablecoins could have practical value.

Consider digital services. A Zimbabwean researcher, programmer, designer, data analyst, or online consultant can sell a service to someone thousands of kilometres away without shipping a physical product. The principal problem may simply be settlement. If a client can pay quickly and the service provider can convert the proceeds into usable funds at reasonable cost, the technology has solved something tangible.

The same logic applies to some remittances. Millions of African households depend on money sent from relatives abroad. Every intermediary and every fee takes a portion of the money that was intended for the household.

Small businesses may also benefit. A company that struggles to access international banking services could potentially use regulated digital payment infrastructure to receive payments from foreign customers.

But there is a catch. The recipient still needs a way to spend or convert the stablecoin. This is where the glamour of blockchain meets the reality of the Zimbabwean economy. A person may receive a digital dollar in seconds. But if converting it into usable funds is expensive, difficult, or legally uncertain, the saving exists mainly on paper.

The whole transaction matters, not merely the blockchain transaction. And in Zimbabwe, the conversion step is often where the value leaks out—through parallel-market rates, mobile money fees, or the simple difficulty of finding a trusted counterparty.

Africa’s Bigger Problem

Zimbabwe is not alone. African businesses routinely cross monetary and regulatory borders. A company trading between Zimbabwe, Zambia, South Africa, and Mozambique can encounter several currencies, several banking systems, and several regulatory regimes. The continent has made progress in improving regional payment infrastructure the Pan-African Payment and Settlement System (PAPSS) is one example, but fragmentation remains an economic cost.

Stablecoins could potentially provide another settlement mechanism. That could be useful for remittances, digital services, and selected business-to-business transactions.

But Africa should not make the mistake of believing that faster settlement is the same thing as deeper integration. A trader does not become competitive simply because payment arrives faster. A manufacturer does not become productive because the invoice settles on a blockchain. A country does not become prosperous because its citizens have digital wallets.

The deeper questions remain. Can businesses obtain finance? Can entrepreneurs enforce contracts? Can investors trust the rules? Can property be protected? Can governments maintain predictable taxation? Can electricity and transport infrastructure support production? Can businesses plan five years ahead without fearing that the rules will change tomorrow?

These are institutional questions. And institutions remain stubbornly analogue.

Regulating the Activity, Not the Technology

This is where Zimbabwe’s policy response matters.

The wrong question is: Should Zimbabwe allow cryptocurrency? That question is too broad to be useful.

The better questions are: Who is issuing the asset? Who is holding customers’ funds? Who is providing custody? Who is converting the stablecoin into fiat? Who is using it to make payments? Who is taking the foreign-exchange risk? And what happens when something goes wrong?

A person holding a stablecoin is not necessarily doing the same thing as an institution issuing one. A wallet provider is not necessarily doing the same thing as an exchange. An exchange is not necessarily doing the same thing as a payment processor. Different activities create different risks.

Regulation should therefore follow the economic function rather than simply the technology. That means transparency over reserves. Clear redemption rights. Consumer protection. Anti-money-laundering safeguards. Clear taxation rules. Proper accounting treatment. And cooperation between regulators across borders.

A blanket prohibition may not eliminate demand. It may simply push the activity into less visible channels—where consumer protection is weaker, fraud is easier, and tax revenue is lost. Good regulation should make legitimate activity safer without pretending that technology can be wished away.

Zimbabwe has some experience here. The 2018 directive barring banks from processing cryptocurrency transactions did not eliminate crypto use in the country. It simply moved it underground, into informal peer-to-peer channels that were harder to monitor and easier to abuse. That is a lesson worth remembering.

The Question of Trust

There is a deeper lesson here.

Money works because people trust that others will accept it. Banks work because depositors trust that their claims will be honoured. Contracts work because people trust that the law will protect their rights. Markets work because people can make plans based on expectations about the future.

Stablecoins introduce a new version of an old problem. Instead of asking whether a central bank can maintain the value of a currency, users may ask whether a private issuer can maintain the value of a digital token. The institution has changed. The trust problem has not.

This is why the stablecoin debate is ultimately not about blockchain. It is about institutions.

Zimbabwe has spent years debating currency, but the deeper issue has always been confidence. People want to know whether tomorrow’s money will retain value. Businesses want to know whether tomorrow’s rules will resemble today’s rules. Investors want to know whether their property will remain theirs. Workers want to know whether their wages will retain purchasing power.

These are all questions of institutional credibility. Technology can reduce the cost of moving value around an economy. It cannot manufacture credibility.

Zimbabwe Should Experiment, Not Romanticise

There is a sensible middle ground between embracing stablecoins as the future of money and treating them as an enemy of monetary sovereignty.

Zimbabwe could begin with controlled use cases. Digital-service exports are one possibility. Remittance corridors are another. Small and medium-sized enterprises engaged in legitimate cross-border commerce could provide a third testing ground.

The objective should be empirical. Measure settlement costs. Measure transaction times. Measure conversion costs. Measure consumer complaints. Measure fraud. Measure the effect on foreign-currency flows. Measure whether the system actually helps small businesses or merely creates another market dominated by technically sophisticated intermediaries.

Policy should follow evidence. Not hype. Not fear. And certainly not the assumption that every technological innovation is automatically an economic revolution.

Other African countries offer useful reference points. Nigeria’s central bank initially banned banks from servicing crypto firms, then reversed course and launched its own digital currency, the eNaira, with limited adoption. Kenya’s M-Pesa succeeded not because it was technologically sophisticated but because it solved a specific problem (person-to-person transfers) within a regulatory environment that allowed experimentation. South Africa has taken a more permissive approach, licensing crypto asset service providers. Zimbabwe can learn from all three.

Faster Money, Better Institutions

The stablecoin debate ultimately forces Zimbabwe to confront an uncomfortable question: why are people interested in alternative payment systems in the first place?

If the answer is that existing systems are expensive, slow, or uncertain, then the response cannot simply be to attack the alternative. It must also improve the underlying system.

Stablecoins may reduce the cost of sending money. They may help a Zimbabwean freelancer receive payment from abroad. They may make some remittance corridors cheaper. They may help certain businesses settle cross-border transactions.

But they cannot repair fiscal policy. They cannot create productive industries. They cannot guarantee property rights. They cannot provide trade finance. They cannot build roads. They cannot generate electricity. And they cannot manufacture trust in government or private institutions.

That is the central lesson Zimbabwe should take from the stablecoin revolution.

The future of money may become digital. The foundations of economic freedom will not. A country still needs secure property rights, predictable rules, sound institutions, and credible money.

Stablecoins may make the movement of value faster. The harder task is creating an economy in which people have something valuable to exchange in the first place.

The Question Worth Answering

Zimbabwe should neither worship the technology nor fear it. It should ask the more difficult question: does this innovation reduce the cost of economic freedom, or merely help people navigate around the weaknesses of the existing system?

The honest answer is: both. And that is precisely why the policy response must be nuanced.

For the freelancer in Harare, the nurse in the diaspora, and the trader in Bulawayo, stablecoins may offer a genuine improvement in their economic lives. That matters. It is not nothing.

But for Zimbabwe as a whole, the technology cannot substitute for the harder work of building institutions that people trust. It can only buy time and time, like money, must eventually be spent on something real.

That is the question worth answering before the digital dollar becomes ordinary money.

Tinotenda Bhunu is an economist by profession. LinkedIn: https://www.linkedin.com/in/tinotenda-bhunu-114645208?utm_source=share&utm_campaign=share_via&utm_content=profile&utm_medium=android_app