Everyone Deserves a Stable Dollar

Just under half of every US dollar ever printed lives outside the United States. The Federal Reserve puts the share held abroad at 44.5% as of early 2025; a second Fed study argues it is closer to 60%, along with 70% of all hundred-dollar bills. Either way, it is over a trillion dollars in paper, sitting in drawers and under mattresses on six continents.

The Fed’s explanation for where the paper goes is short: demand rises in crises, because banknotes hold their value “when local currency or bank deposits are inferior.”

That sentence, written in the careful dialect of central-bank research, describes the daily financial reality of roughly a billion people. Counting across the IMF’s inflation data for 191 economies, about 1.08 billion people lived in countries where prices rose more than 10% in 2025, and around 167 million are on track to live with inflation above 50% this year. The IMF raised its global forecast in July and conceded that disinflation “has stalled.”

“Everyone deserves a stable dollar” is usually read as an aspiration. The evidence supports a harder reading: people have already made the choice, at enormous scale, in the least convenient instrument available. A hundred-dollar bill in a drawer in Lagos or La Paz is bulky, uninsured, stealable, and impossible to send to anyone. It is still the best option open to hundreds of millions of people.

Fifteen years of erosion

A yearly inflation number understates what a saver actually lives through, because the losses compound across a working life. The better question is cumulative: what a unit of local currency bought in dollars in 2010, against what it buys now. Measured that way, eight of twelve major emerging-market currencies lost more than 80% of their dollar value between 2010 and 2025.

Argentina is the extreme. Of every hundred dollars of value an Argentine held in pesos in 2010, about thirty cents survives.

These figures are conservative twice over. They use official exchange rates, and in many of these countries the official rate is a fiction: the real price of a dollar is set on the street, at a premium. And two of the worst performers are missing entirely. Venezuela and Zimbabwe had to be excluded because they renamed and redenominated their currencies so many times that the data series broke, which says as much as any bar on the chart.

A tax collected from the bottom

Inflation is often called a tax, and the data shows who pays it. Argentina’s central bank estimates that the inflation tax hits poor households, as a share of income, at 2.6 times the rate it hits wealthy ones, and says why: poorer families keep more of what they have in cash. An IMF study puts the cost of living under high inflation at 18.5% of annual income on average. For the poorest fifth, it is 26.7%. Roughly one dollar in four, gone.

The mechanism is unremarkable. Wealthy households hold property, stocks, and foreign accounts, things that rise with prices. Poor households hold banknotes and, at best, a local bank deposit. What the poor own is precisely what inflation destroys.

The conventional advice, save at a bank, frequently makes it worse. In 41 of the 86 countries with data, bank interest in 2024 paid less than inflation took away; in Argentina the gap ran past 165 percentage points. In roughly half the world’s measured economies, a savings account was a guaranteed way to lose purchasing power. Worth remembering whenever financial inclusion is scored by how many people have accounts.

The overnight version

And the erosion is not smooth. It arrives in steps, announced on a Tuesday, sized so that a family’s savings can lose a third of their value between dinner and breakfast.

Bolivia is the instructive recent case. The country held its exchange rate fixed at 6.96 bolivianos per dollar for fifteen years while the street price ran near 20, and its reserves fell to $73 million, less than one month of imports, before the peg finally broke in June 2026. For years, anyone reading the official rate would have concluded the currency was stable. Anyone buying groceries knew otherwise.

The dollar is rationed

Households respond the only way available to them: they buy dollars. Where holding them at a bank is legal, they do, at extraordinary rates. Foreign currency makes up 98.6% of bank deposits in Lebanon, 90.7% in Cambodia, 73% in Uruguay. But in much of the world, the legal channel is rationed. The IMF counts 96 countries with rules restricting how much foreign money an ordinary person can buy or hold. Argentina caps cash dollar purchases at $100 a month, even as its citizens’ legal dollar deposits sit at an all-time high. Ethiopia requires a $100 minimum just to open a foreign-currency account, and takes half of every exporter’s dollars at the official rate.

Look at the structure of these rules. Each is a mild inconvenience to a corporation and a wall to a household with irregular cash income and thin paperwork. A $100 account minimum is trivial for a business and prohibitive for a market vendor. The result is a two-tier system: the wealthy get dollars legally and cheaply, and everyone else pays the street price.

Nigeria’s bar is the one to sit with. In May 2023 the street price of a dollar was 62% above the official one; after Nigeria let its currency float, the gap collapsed to 6.4%. The premium was never a law of nature. It is the price of the rationing, and it is paid by the people locked outside the official channel.

The workaround people already chose

Stablecoins, dollars that live on the internet instead of in a bank, became the answer from the bottom up. Total supply reached roughly $310 billion in July 2026, more than 99% of it denominated in dollars, held by an estimated 277 million people. Sixteen of the twenty countries where crypto adoption runs highest are emerging or frontier markets, and the transfers skew small: in Sub-Saharan Africa, the share of volume moving in amounts under $10,000 runs well above the global norm. This is ordinary people moving ordinary amounts.

The surveys say the use is saving, not speculating. In the largest study of emerging-market stablecoin users, 47% said they hold them to save in dollars, rising to 64% in Nigeria, and 39% had used them to send money to family across a border. The IMF looked at Nigeria, the source of roughly 60% of Sub-Saharan stablecoin inflows, and concluded that “attempts to suppress stablecoin use are likely to be only partly effective.”

Then came the finding that reframes the whole debate. Dollars held in a stablecoin slip past the capital controls that stop dollars held in a bank. That is the conclusion of a 2026 BIS study spanning more than 130 economies: “stablecoin flows seem to be largely unaffected by either broad or specific capital flow restrictions.” The BIS wrote it as a warning. Read against the rationing above, it is also a verdict: the machinery that gated dollar access by wealth and paperwork does not bind the digital dollar. You can argue about whether that is good. You can no longer argue about whether it is happening.

Capital controls no longer bind the digital dollar. Cash still does.

The last mile

So the token exists, the demand is measured, and the controls no longer hold. What still binds is physical. Cash carries 55% of in-store spending in Nigeria, 42% in the Philippines, 40% in Mexico, and it is not fading: the BIS finds cash in circulation holding steady near 6% of GDP across emerging economies even as digital payments grow. For most of the people in this story, income arrives as paper. A digital dollar with no way in from paper is a product for people who already have bank accounts.

Mobile money, the one genuine mass-market digital-money success of the last two decades, proves the point. Over $2 trillion moved through it in 2025, and 38% of that value entered or left as physical cash, through 28 million human agents: 755 of them per 100,000 adults across the markets where it works. Even the canonical success story needed people on corners converting paper. For comparison, Sub-Saharan Africa has 6.9 ATMs per 100,000 adults against a world average of 41.9, and half the rural population of seven major markets lives more than five kilometres from any financial access point at all.

The gap between those bars is the finding. The Kansas City Fed reports that the median US crypto ATM charges a 16% fee to buy — $16 of every $100 fed into the machine — plus a hidden 5–7% markup on the exchange rate, while the machines cost their operators only 3–6% of revenue to run. That is not what the service costs. It is what the operator can get away with, and it has already started to collapse: the global crypto-ATM count fell by more than ten thousand machines in two months of 2026, the largest operator entered bankruptcy, and four US states banned the machines outright. The fraud numbers explain the mood: $389 million in reported kiosk losses in 2025, 71% of it taken from people aged sixty and over.

The usual fallback, buying from strangers on peer-to-peer markets, quotes a spread of half a percent and hides the real price. Nigerian traders on these markets report frozen bank accounts, chargeback fraud, and stolen coins, and have adapted by refusing trades over $500. A cheap price that carries a real chance of losing your account is not a cheap price. Removing that kind of risk is what infrastructure is for.

The honest ledger

The strongest objections are worth taking seriously, because several of them are right. When a country’s savings move into dollars, its government genuinely loses tools. The IMF’s post-mortem of Argentina’s 2002 collapse concluded that a heavily dollarized economy limits the state’s power to rescue its own banks, whatever its exchange-rate policy. Those costs are real, and they do not disappear because the dollarization is digital.

The instrument needs scrutiny too. Regulators found that Tether, the largest stablecoin issuer, held full backing for its token on only 27.6% of days across a 26-month sample, and its own terms give small holders no direct right to redeem. A market trader in Lagos holding USDT holds a claim on an offshore company that they could never personally enforce. If the issuer refused to pay, there would be no one to call. Calling that “a dollar” without qualification is imprecise.

What the objections do not establish is that keeping households away from stable value makes their lives better. The IMF’s own research documents the persistent street premiums that controls produce, and warns that new restrictions “may trigger new leakages”; the BIS finding closes the loop. The real choice on the table is between dollarization at half a percent through a supervised channel and dollarization at 20% through a street changer, with the risks unmanaged either way and the fraud landing on whoever can least absorb it.

What the claim should mean

All of it, taken together, leaves the claim standing in a specific form: every person should be able to hold savings in money that does not lose value predictably, and to move between that money and cash at a fair, transparent, supervised price, with or without a bank account. That version picks no fight with any country’s monetary policy, sets a bar the token itself has to meet, and puts the work where the data says the gap is: the price and reach of the ramp. The evidence even writes the spec:

• Price is the product. Banks convert money for their own customers at a fraction of a percent; kiosks charge 16% against 3–6% costs. The honest benchmark is a round trip under 3%, the same target the UN set for remittances. A stable dollar sold at a 20% entry fee is a year of inflation charged up front.
• Density decides usefulness. Mobile money became part of daily life at 755 agents per 100,000 adults; Sub-Saharan ATMs sit at 6.9. The door has to be a walk away, where cash already changes hands, or it may as well not exist.
• Money must flow both ways. Savings that cannot come back out as cash are a trap. And because moving paper around is more than half the cost of handling it, a door that takes cash in and pays cash out at the same spot is what makes sub-3% pricing arithmetic instead of marketing.
• Identity protects people. Anonymous machines concentrated 71% of their fraud losses on people over sixty. A door that knows its customer can notice a frightened first-time user being coached through a transaction. An anonymous one structurally cannot.

The demand side of this story never needed proving. It has been sitting in the Federal Reserve’s own data for decades: a trillion dollars of paper doing quiet duty in drawers and mattresses on six continents. The token side sorted itself out in six years. What remains is the unglamorous part, doors near where cash already lives, open both ways, priced like infrastructure instead of scarcity. Guap is building them. The bill in the drawer has waited long enough.