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My thesis on why Zimbabwe should adopt Stablecoins for remittances - Part 1
The 17th-century goldsmiths and early banking
It’s arguable that among the first bankers were London goldsmiths around the 17th century. The gold standard through which we got fiat/paper money came through those, as receipts for gold deposited with them by wealthy individuals for safekeeping. However, money has its roots way before this age, tracing back to the Chinese centuries earlier. I am more interested in the goldsmiths. The receipt given to the gold depositor was a special promise to redeem it for gold at any time.
Depositors started using these receipts for payment as they were more convenient than gold, and whenever you wanted your gold, you could go to the goldsmiths to redeem it. The goldsmiths could also loan a certain percentage of the gold, thus resulting in money creation, concepts like reserve requirement, and other banking concepts that we know today. That’s not my focus for this writing. My focus is for you to think of this and relate this to the stablecoin concept that we have today, as well as ZIG.
A goldsmith receipt from 1633 is attached below.
Satoshi and the upgrade of money - blockchain
It was safer to keep your gold with the goldsmiths and more convenient to use the receipts (paper) to make payments.
Since the 17th century innovation of paper money from gold to the 21st century, enter Satoshi and Bitcoin. Bitcoin was developed to be a ‘‘peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution”. Because of the need for trusted third-party institutions such as banks, the cost of mediation of all these parties increases transaction costs. All the trusted third parties or banks you need to act as intermediaries to send money from the USA to Zimbabwe increase your transaction costs because of the cost of mediation.
Taking a leaf from Bitcoin, there was Tether. Tether (USDT) was developed as a fiat-backed currency leveraging blockchain technology. The limitation of bitcoin for other players, especially in making payments or as a store of value, is volatility. A stablecoin is thus an asset-pegged cryptocurrency whose value is based on the reserve asset, which in this case is the US Dollar and US marketable securities. By depositing USD100.00 into a tether account, you get USDT /stablecoin worth USD100.00, which you can use to transact.
- in real time
- cross-border without intermediaries
- at a low transaction cost
As you can see, the stablecoin concept is similar to the gold receipts concept of the 17th century for enabling payments, except this is an upgrade. It increases the speed of commerce, eliminates intermediaries, and reduces transaction costs dramatically.
Global stablecoin market capitalization
As of 31 July 2025, the global stablecoin market cap stands at $265B, and the USA government passed the GENIUS Act to officially recognize stablecoins. The second-largest stablecoin issuer has just had an IPO. The industry has finally matured.
Stablecoin issuers have become large holders of US treasuries, among sovereign states as per Ark Invest data below.
Below we can see that Tether, the largest stablecoin issuer, holds $143.7B in reserves with $94.5B in treasury bills as of FY2024.
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