Since 2021, Scalex has been on a mission to make cross-border transactions more accessible and efficient for businesses and individuals in emerging markets. We got together with founder Nnaemeka Nwosu, who believes that the transformative potential of stablecoin-powered payments in these markets, especially in Africa, is often underestimated.
While much of the global attention has focused on DeFi and speculative use cases in developed markets, Nnaemeka sees the true power of stablecoins in everyday transactions, remittances, and B2B payments where access to stable currencies is limited.
In places like Nigeria, where billions of dollars in trade flow through informal channels each week, stablecoins can formalize and streamline these transactions, creating a more transparent and efficient system for businesses and individuals alike.
In this interview, we explore Scalex's core mission, its strategic shift towards B2B partnerships, and how stablecoin-powered payments are poised to revolutionize financial systems in Africa and beyond.
Adaverse: Can you tell us about Scalex and what problem you're solving?
Nnaemeka: Scalex is providing stablecoin-powered payments infrastructure in emerging markets, starting from Africa. We're addressing the inefficiencies in traditional payment solutions, especially when it comes to cross-border payments, B2B invoice payments, and payroll.
Coming from a banking background, I saw firsthand how these challenges put businesses and individuals at a disadvantage. When I discovered blockchain technology, I realized its potential to enable borderless, peer-to-peer payments almost instantly across the globe.
Adaverse: How did Scalex evolve to its current form?
Nnaemeka: We started with an automated peer-to-peer marketplace, which was actually the first of its kind in Africa. However, when larger players like Binance entered the market, we had to pivot. Our breakthrough came when we partnered with FTX to provide on and off-ramp infrastructure for their users in Nigeria.
This experience showed us the potential in B2B services. We've since developed a comprehensive infrastructure that includes fiat rails, liquidity provision, and wallet solutions. Today, we're processing millions in transaction volumes, with 80% coming from our B2B services.
Adaverse: What unique challenges do businesses in emerging markets face when it comes to payments?
Nnaemeka: Many local businesses struggle to access US dollars through banks due to forex shortages. For example, a business importing parts might only be able to source 10% of their needed forex through banks. They have to scramble to find the rest through various channels, often at high premiums and with long delays.
We're solving this by leveraging stablecoins. We can help that same business make payments that arrive the next day, at a fraction of the cost. This is transformative for businesses operating in these markets.
Adaverse: Can you share some of Scalex's recent achievements and future plans?
Nnaemeka: This year to date, we've processed $4.5 million in transaction volumes, with 80% coming from our B2B services. We've grown from 3 API partners last year to over 15 this year, including global players like Espresso Cash and AlchemyPay.
We're also expanding rapidly. We've signed a partnership to enter nine new markets in Francophone Africa, and we're looking at opportunities in Latin America. Additionally, we're setting up rails in North America and Canada to tap into the massive remittance market.
Adaverse: What's your perspective on the potential of stablecoins in emerging markets?
Nnaemeka: I believe the stablecoin market in Africa is underrated. While we see a lot of investor activity in markets like Singapore, the velocity of stablecoin-powered payments for real-life transactions - remittances, B2B payments, invoice payments - is massive in emerging markets like Nigeria.
Stablecoins are democratizing access to US dollars in these markets. On a daily basis, billions of dollars are being transacted to power trade in Nigeria alone, much of it through informal channels. This presents an enormous opportunity that I think is often overlooked.
Adaverse: How has Adverse Capital supported Scalex's journey?
Nnaemeka: Adverse Capital was one of our earliest and biggest backers. Their support gave us the fuel to build out our initial product and eventually develop the first version we built for FTX. While we haven't been able to build directly on Cardano due to market conditions, we remain open to opportunities as the ecosystem develops.
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