A dollar-pegged stablecoin is one instrument. In New Delhi it reads as an attack on the state. In Lagos it reads as the only way to pay a supplier this month. The gap between those two readings is the most useful thing to understand about how the Global South is metabolizing the GENIUS Act, which turned American-issued USD tokens from a fintech curiosity into a piece of foreign monetary infrastructure that every other central bank now has to price in.
Two central banks reached opposite conclusions in the space of a month. The contrast is the story.
India: containment as sovereignty defence
On 2 July 2026, Reserve Bank of India Deputy Governor Rohit Jain and Executive Director P. Vasudevan appeared before the Parliamentary Standing Committee on Finance. The RBI’s background note to the panel did not hedge. It backed a “calibrated containment strategy leaning towards prohibition,” and stated plainly that “prohibition remains one of the recognised policy options under international standard-setting frameworks and continues to merit careful consideration.”
The argument is explicitly sovereignty, not consumer protection. Widespread adoption of dollar-pegged stablecoins, the RBI told the panel, could undermine monetary sovereignty, weaken monetary-policy transmission and fragment the payment system. Strip the framing down: if Indians save and settle in USD tokens, portions of the domestic economy dollarize, and the RBI loses grip on the levers, interest rates, capital flows, the exchange rate, that a central bank exists to pull. The four planks of the note follow from that fear. Prohibition stays on the table. Banks and regulated institutions get insulated from crypto and private stablecoins entirely. Crypto is barred from payments and settlement. And regulating these assets under conventional financial rules is rejected on the grounds that it would legitimise them.
Here is the number that complicates the posture. India’s own public alternative is shrinking. The retail digital rupee in circulation stood at ₹771.7 crore on 31 March 2026, down from ₹1,016.5 crore a year earlier, a fall of roughly 24 percent, per the RBI’s Annual Report 2025-26. That decline came even as the central bank widened CBDC pilots into direct-benefit-transfer schemes, crediting food subsidies through programmable e-rupee in Gujarat, Puducherry and Chandigarh.
So the state wants to block the private dollar token while its own digital currency, the thing meant to deliver the programmability and instant settlement that stablecoins promise “without surrendering monetary control,” is contracting. Containment is a coherent defence only if the fortress has something inside it. India is building a higher wall around a shrinking garrison. The e-rupee’s early growth looks increasingly like incentive-driven pilot activity normalising downward, not organic demand. Prohibition does not fix that. It just removes the competitor that was exposing it.
Africa: dollar access of last resort
Now move the same token to Sub-Saharan Africa, where the policy question is not “how do we keep the dollar out” but “how does anyone get a dollar at all.”
Nigeria accounts for roughly 40 percent of stablecoin inflows across Sub-Saharan Africa, by far the region’s largest share, according to Chainalysis, whose 2025 Geography of Cryptocurrency report clocked more than $205 billion in on-chain value flowing into the region between July 2024 and June 2025, up 52 percent year on year. The IMF puts Nigeria’s share higher still, near 60 percent since 2019. Either figure tells the same story: one country dominates, and it is the one with the broken currency.
The mechanism is a foreign-exchange failure, not a crypto fashion. The naira fell from about 460 to roughly 1,500 per dollar between 2023 and early 2025, a loss of more than 60 percent. Official FX windows cannot meet demand: fewer than half of Nigerian manufacturers could source dollars from the official window in the third quarter of 2025, even after reform. When the formal channel is dry, an importer who needs to pay a Chinese or Turkish supplier before a shipment deadline has one reliable option left: buy USDT or USDC with naira and settle on-chain.
That is a business, not a hedge narrative. Clea, a Nigerian startup, lets importers pay in naira and settle overseas suppliers in dollars within hours using stablecoins as the rail. Its founder describes watching businesses “scramble to find alternative routes, rely on intermediaries or worry about whether a payment would arrive before the deadline.” Infrastructure firms like Yellow Card now move billions in stablecoin volume across the continent, and both Visa and Mastercard have selected African stablecoin rails as payment partners. Nigeria processed close to $22 billion in stablecoin transactions in a single year, most of it in transfers under $1 million, the signature of merchants and importers, not speculators.
And the states are licensing it, not banning it. Kenya’s Virtual Asset Service Providers Act, 2025 came into force on 4 November 2025. The Central Bank of Kenya keeps jurisdiction over wallet providers, payment processors and stablecoin issuers, with the Capital Markets Authority covering exchanges and brokers; detailed licensing regulations from the National Treasury are the last step before applications open. Kenya is scaling on M-Pesa rails, the mobile-money network already embedded in daily commerce. The direction is the mirror image of India’s: bring the activity inside the regulatory perimeter rather than seal the perimeter against it.
Same token, inverse logic
The instrument does not change. The policy logic inverts on one variable: does the state fear the dollar, or need it.
India fears it. A large economy with functioning FX markets, a credible currency and monetary-policy autonomy sees a dollar stablecoin as a solvent that dissolves control it currently holds. Containment is top-down, and the threat model is dollarization. Nigeria and Kenya need it. Economies where the official dollar supply has failed see the same token as the plumbing that keeps trade moving. Adoption is bottom-up, demand-driven, and the state’s realistic move is to license and tax what it cannot suppress.
This is what the GENIUS Act actually exported. By giving USD stablecoins a clear American legal home, Washington made them a geopolitical variable rather than a payments product, and handed every Global South central bank the same question with two opposite answers baked in. Where the domestic currency works, the dollar token is a sovereignty risk to be walled out. Where it does not, the dollar token is survival infrastructure to be plugged in. The GENIUS Act did not pick a side. It just made the choice unavoidable, and the split it produced runs straight down the line of which currencies still command the confidence of the people who have to use them.
The uncomfortable read for New Delhi is that containment and need sit closer together than the framing admits. A wall holds only as long as the currency behind it does. India is not Nigeria today. The RBI’s job is to make sure the day it faces Nigeria’s question never arrives, and a shrinking e-rupee is not the answer to it.
Discussion
Sign in to join the discussion.
No comments yet. Be the first to share your thoughts.