The quiet dollarization

A few weeks ago I argued that prediction markets are stubbornly local — split across licenses, liquidity pools, and currencies — and that connecting them takes a federation: local venues on top of two shared things, a common resolution layer and a common unit of account. The resolution half is its own hard problem. This is the other one: what do the markets settle in?

It sounds like plumbing, and it is, but the answer reshapes who has power. To let a market in Hanoi net against a market in New York, both sides have to hold and settle in the same thing. And the thing the entire industry is quietly converging on is a US-dollar stablecoin. For America that's just convenient. For an emerging market, choosing the dollar as your settlement rail is a monetary decision with a name — dollarization — and it's happening through the back door, one app at a time.

The settlement half of the problem

Recall the trap. A US trader on a dollar venue and a Vietnamese trader on a đồng venue can't meet in the same order book, even on the same event — different licenses, different currencies, walled pools. The price that should be one global number fractures into many. To heal that, the pools need a bridge: a unit both can hold, that moves across borders cheaply, and that nets cleanly. That's the unit of account — the connective tissue of the whole federation.

Why the answer is probably a stablecoin

Three years ago this would have been a hand-wave. Now there's a real answer, because the dollar went digital and got a law. The GENIUS Act, signed in July 2025, is the first US federal framework for payment stablecoins: it requires every coin to be backed one-for-one by dollars or short-dated Treasuries, which is exactly the property a settlement rail needs.¹ The market followed: total stablecoin capitalization grew about 49% in 2025, from roughly $205B to over $300B.² A regulated, dollar-pegged, programmable token that moves worldwide in seconds is very nearly the perfect connective tissue for a global market.

It also fixes the legibility problem from last time. A token worth about one dollar restores the small miracle that made prediction markets readable: a price of 62¢ is a 62% probability again, no division by 26,000 required. Settle the world's markets in a dollar stablecoin and they're all legible, all nettable, all one click apart. Which is precisely the problem.

A dollar stablecoin is dollarization

Here's the part that's obvious from Hanoi and invisible from San Francisco. If Vietnamese traders settle their markets in a US-dollar stablecoin, they are — at the margin, and then more than the margin — moving their savings and their risk into dollars. That is dollarization: the slow substitution of a foreign currency for the local one inside your own economy. It has happened before, to countries that didn't choose it, and it costs a central bank its most important levers. When enough of the economy runs on dollars, the State Bank's interest rate, its exchange-rate management, its lender-of-last-resort power — the very things prediction markets would help citizens forecast — all weaken. The feature that makes the dollar stablecoin a perfect global rail (it's the dollar) is exactly what a monetary sovereign has spent decades guarding against.

So the unit-of-account question isn't a technical detail to be optimized away. It's a genuine trilemma, and you can have at most two of the three things you want.

A local-currency stablecoin keeps sovereignty but reintroduces the đồng's legibility problem and strands you in a thin, local pool — back to fragmentation. A central-bank digital currency keeps sovereignty and can be programmable, but a CBDC that settles cleanly across borders is years away and carries its own surveillance baggage. The dollar stablecoin wins every box but the last — and the last is the one a finance ministry will fight over.

Vietnam is about to run the experiment

What makes this concrete rather than theoretical is that Vietnam just built the runway. After years in a grey zone, the National Assembly passed a Law on Digital Technology Industry in June 2025 that recognizes digital assets under the Civil Code, effective January 2026; a September 2025 resolution then opened a five-year pilot for a regulated crypto-asset market.³ A country with one of the highest crypto-adoption rates on earth has, for the first time, a controlled sandbox in which exactly this question can be answered: can you give people legible, well-settled markets without handing the dollar the keys to your monetary system?

The most plausible answer is a hybrid the pilot could actually test: settle and net in a regulated stablecoin for cross-border legibility, but denominate and report to users in đồng, with the central bank in the loop on reserves and flows — sovereignty preserved at the layer that matters, legibility borrowed where it helps. Nobody has shipped that. It's unsolved, it's contested, and it's the kind of thing that gets decided by whoever builds the first credible version under a real license.

What's hard

The honest caveats are large. A stablecoin is only as good as its reserves — a depeg turns "62¢ = 62%" back into chaos, and the GENIUS Act reduces that risk without erasing it. Capital controls and the pilot's own guardrails may simply forbid the cleanest design. And the deepest tension doesn't resolve: the more useful the shared dollar rail is, the more it erodes the sovereignty it runs through. There is no settle-everywhere-in-a-readable-unit option that doesn't, somewhere, cost a central bank control.

But that's the nature of an open problem — it's a real choice with real costs, not a bug to patch. The markets we keep promising the world don't connect until they share a unit, and the unit they're reaching for is the dollar. Whether emerging markets get to keep a hand on the wheel while they plug in is, I think, one of the more consequential questions this whole category raises — and it'll be answered first in places like Vietnam, not in Washington. That's exactly the layer we're building toward at Seeker, with Vietnam as the launchpad: local legibility, global settlement, sovereignty intact. The demo is live; the answer isn't written yet.