Etherfuse Aims to Bring 100 Sovereign Currencies Onchain

Dave Taylor isn't interested in building another dollar rail. While most crypto companies fight over the same USD territory, Dave’s team at Etherfuse is reimagining what's possible with Stellar, by bringing local currency bonds onchain.

Most people know stablecoins. They're digital tokens pegged to traditional currencies, usually the dollar. Stablecoins have become the backbone of crypto, with the market surging past $200 billion. But over 95% of that is USD-denominated.

Where others see domination, Etherfuse sees opportunity. Instead of building more dollar-pegged tokens, they're issuing local "stablebonds," tokens backed by short-term government treasuries from countries like Mexico and Brazil. These treasuries often mature in 90 days or less. The key difference? Stablebonds let users earn yield while holding their local currency. Stablecoins, on the other hand, maintain a peg and don’t generate yield.

The demand is already there. Brazil moved $318 billion in crypto last year, accounting for nearly a third of all crypto activity in Latin America. People outside the US want financial tools built with their local currencies for their local markets.

Here's where it gets interesting. "If you went onto Stellar Expert, looked at the market for our product, you can trade it from the dollar to CETES for about four bips, which is an institutional-grade FX fee," Taylor says. "Anybody can do that."

Historically, cross-border payments ran around 700 basis points (7%), "because there's like 16 layers of fees involved where intermediaries take their cut,” according to Taylor.

Etherfuse cuts conversion costs from 7% to 0.04%—a 175x improvement—by eliminating the middlemen. Taylor credits the ecosystem: "Thanks to the [SDF] team and the [Stellar] ecosystem, this is not theoretical; this exists today."

According to Taylor, the model fundamentally changes the economics. By putting the risk-free rate directly in users' hands instead of hiding it behind layers of financial services, Etherfuse caps what companies charge. In a competitive market, a wallet provider or payment company can't justify fees higher than the bond yield itself. Instead of competing to extract maximum value, companies now compete for how little they can charge.

While lower fees are the most obvious benefit, the long-term upside is about giving countries real alternatives to reliance on the U.S. dollar in global finance. "It's not good to have one country represent the sovereign decision making of a financial product for the rest of the world," Taylor argues. When nearly every stablecoin, payment rail, and savings product runs on dollars, countries lose control over their own monetary policy. "The incentives for us aren't good. It's good for us to have healthy counterparty economies," Taylor continues.

When a major country recently reached out to Etherfuse about issuing their debt onchain, they explicitly said the nation’s "sovereignty is at stake." Taylor had been making this argument for two years. Now governments are getting it.

Taylor's goal is to bring 100 sovereign currencies onchain as yield-bearing assets. "We want to be the AWS of sovereign debt," he says, "so builders can focus on creating products that were impossible before."

The impact is already visible. "If you wanted to create a hedge product in TradFi, it is so difficult, like near impossible," Taylor explains. "But on Stellar, with stablebonds, you can do it today. It's very simple."

When that vision scales, anyone with a Stellar wallet could build hedging products that would require entire compliance teams in traditional finance. A small business in São Paulo could hold productive assets in reais without converting to dollars. An entrepreneur in Mexico City could access institutional-grade FX without a bank relationship.

For the Etherfuse team, this isn't just about efficiency gains. It's about sovereignty. When local currencies can move freely, earn yield transparently, and compete fairly in open markets, the financial system becomes more accessible.

Taylor has a one-sentence vision for the future: "Equal access to all financial services across the world for free or near-free for the user."

The future he's building isn't one with a single dominant currency, but 100 currencies flowing freely on open rails, with users keeping the yield that banks used to capture. That's not just better infrastructure. That's a different game entirely.

Want to hear the full conversation? Listen to Dave Taylor's complete interview with Denelle Dixon on the block by block podcast to dive deeper into how stablebonds work, why Mexico was the first market, and what happens when sovereignty meets open finance.