Pennings, A.J. (2026, Jul 20) From USAID to Digital USD: The Next Generation of Financial Inclusion. apennings.com https://apennings.com/global-e-commerce/from-usaid-to-digital-usd-the-next-generation-of-financial-inclusion/

Introduction

When I was an undergraduate, I was invited to co-author Computerization and Development in Southeast Asia. It was while I was doing an one-year internships at the East-West Center (EWC). The Honolulu-based institution was known for its work on Communication for Development (C4D) since it was started in the early 1960s, primarily due to the leadership of Wilbur Schramm in media and Meheroo Jussawalla in development economics. But it was Syed Rahim that began a new vector in use of computers for development.

The history of international development over the last seventy years can be understood as a gradual transition from resource allocation to financial inclusion and now toward global liquidity coordination.

This trajectory also mirrors the development of information and communication technologies for development (ICT4D), which increasingly recognized that communications infrastructure and digital finance are as important to economic development as roads, schools, and power plants. Rather than replacing earlier approaches, each stage built upon its predecessor while shifting the focus from government-directed aid toward distributed digital infrastructures capable of enabling markets as well as social development.

The first phase emerged during the Cold War with the creation of the United States Agency for International Development (USAID) in 1961. USAID represented the dominant postwar development paradigm. Governments, multilateral institutions, and international experts designed projects intended to stimulate growth through investments in agriculture, education, healthcare, infrastructure, and democratic governance. These initiatives undoubtedly improved millions of lives, but they often depended on large bureaucracies, lengthy approval processes, and continual external financing. Development was largely conceived as the transfer of resources from wealthy countries to poorer ones.

By the 1990s and early 2000s, a different perspective began to emerge through the field of Information and Communication Technologies for Development (ICT4D). Scholars and practitioners increasingly argued that communications networks were themselves engines of development. Expanding broadband, mobile telecommunications, and Internet access could reduce information costs, connect producers to markets, improve educational opportunities, and increase governmental transparency. Development became less about delivering projects and more about building information infrastructures capable of supporting local entrepreneurship and innovation (Heeks, 2002; Unwin, 2009).

The mobile phone dramatically accelerated this transition. In countries where traditional banking systems remained inaccessible to much of the population, mobile networks provided an alternative platform for financial inclusion. Services such as Kenya’s M-Pesa demonstrated that millions of previously unbanked individuals could securely send and receive money using inexpensive mobile devices without requiring conventional bank accounts.

Similar systems spread across Africa, South Asia, and Latin America, making digital payments an essential component of ICT4D strategies. Financial inclusion increasingly became recognized as a prerequisite for economic development because participation in modern markets requires access not only to information but also to reliable payment systems. (Sachs, 2015)

Yet mobile money exposed another structural limitation. Although domestic digital payment systems flourished, access to international liquidity remained constrained. Small businesses, exporters, migrant workers, and households in developing economies continued to encounter difficulties obtaining US dollars, the dominant currency for international trade, commodity pricing, shipping, and debt repayment. Mobile wallets could efficiently move local currencies, but they could not solve the global shortage of dollar liquidity that has long characterized much of the developing world.

Recent US legislation suggests support for a third development paradigm. The GENIUS Act establishes a regulatory framework for payment stablecoins fully backed by highly liquid assets such as short-term US Treasury securities. At the same time, the proposed CLARITY Act seeks to clarify the broader regulatory environment for digital assets and blockchain-based financial markets. Together they create the legal foundation for Treasury-backed digital dollars that function as programmable, globally accessible payment instruments rather than speculative cryptocurrencies.

These developments suggest that development policy may increasingly shift from distributing aid to distributing liquidity. Instead of financing individual projects through centralized bureaucracies, Treasury-backed stablecoins extend direct access to the world’s primary reserve currency through digital wallets operating on global telecommunications networks. For billions of people who remain underserved by conventional banking, the smartphone becomes both a communications device and a gateway to the international monetary system.

From the perspective of spreadsheet logic, this transition reflects a profound change in the architecture of economic coordination. USAID represented an administrative model of development built around projects, budgets, reports, and institutional oversight. Mobile money introduced distributed payment infrastructures but largely within national boundaries. Treasury-backed stablecoins extend this computational grammar into a globally synchronized accounting system where transactions settle in digital dollars secured by US Treasury securities.

This progression can be understood through the layered architecture of spreadsheet logic, expressed in the SACT framework. At the Substitution layer, individuals, businesses, assets, and transactions become digitally identifiable through wallets, credentials, and standardized financial records. At the Abstraction layer, these records are organized into interoperable categories that allow payments, invoices, remittances, and trade finance to operate across jurisdictions using common accounting grammars. At the Symbolic Computation layer, programmable financial logic automates lending, insurance, payroll, taxation, humanitarian transfers, and foreign exchange through smart contracts and, increasingly, AI-assisted optimization. Finally, at the Telecommunications Synchronization layer, distributed ledger networks, cloud infrastructure, and Internet protocols synchronize these computational processes globally, allowing digital dollars to circulate continuously within and across borders.

Artificial intelligence extends this architecture beyond financial inclusion toward international economic coordination. Rather than merely executing transactions, AI agents can monitor liquidity conditions, optimize Treasury reserve allocation, detect fraud, evaluate creditworthiness, forecast currency demand, and coordinate settlement across thousands of distributed payment providers. In this architecture, SACT-AI becomes the coordination engine operating above Treasury-backed stablecoins rather than replacing them. Stablecoins provide the monetary substrate; AI provides the operational intelligence.

This shift may parallel the governance principles articulated by Milton Mueller, John Mathiason, and Hans Klein (2007), who argued that the Internet’s success derived from decentralized coordination through shared protocols rather than centralized political authority. Their insight applies equally to digital finance. A globally distributed stablecoin ecosystem requires not a world central bank but interoperable technical standards, transparent governance rules, secure telecommunications infrastructure, and trusted computational protocols. Liquidity, like Internet traffic, is increasingly coordinated through networks rather than directed by hierarchies.

This perspective also reframes ICT4D itself. For decades, ICT4D focused on connecting people to information. The next stage connects people to global liquidity. Broadband networks, smartphones, cloud computing, digital identity, AI, and Treasury-backed stablecoins become components of a single computational infrastructure supporting commerce, savings, remittances, entrepreneurship, and investment. Development increasingly depends not only on access to knowledge but also on participation in a global accounting and payment system.

The historical progression therefore becomes clear:

USAID sought to allocate resources through development projects.

ICT4D connected people through digital communications.

Mobile money expanded financial inclusion through digital payments.

Treasury-backed stablecoins extend access to global dollar liquidity.

SACT-AI integrates these payment networks into a distributed coordination system capable of managing liquidity, optimizing capital flows, and supporting economic activity at planetary scale.

The central question for international development is no longer simply how to transfer aid more efficiently. It is how to build a globally distributed computational infrastructure that enables billions of people to participate directly in the world’s largest liquidity network. Treasury-backed stablecoins, secured by US Treasuries and coordinated through AI operating across Internet-scale telecommunications networks, represent a plausible next step in that transition. Rather than replacing development policy, they may fundamentally redefine it, from administering projects to coordinating liquidity.

Summary

This post argues that international development has transitioned through three distinct paradigms: government-administered foreign aid, ICT-enabled financial inclusion, and AI-coordinated global liquidity.

EWC Northern Campus

Beginning with USAID’s postwar model of project-based development, the essay traces how the ICT4D movement shifted attention toward communications infrastructure, broadband, and mobile technologies as engines of economic growth. Mobile money platforms such as M-Pesa demonstrated that digital networks could provide financial inclusion for millions without access to traditional banking, but they remained constrained by limited access to U.S. dollar liquidity.

The article contends that Treasury-backed stablecoins, enabled by the GENIUS Act and supported by the regulatory clarity envisioned in the CLARITY Act, present the the possbility of a new stage in this progression. Rather than distributing aid through bureaucratic programs, stablecoins distribute access to liquidity through globally connected digital wallets.

Further interpreted through spreadsheet logic and the SACT framework, these digital dollars transform financial infrastructure into a globally synchronized system of substitution, abstraction, symbolic computation, and telecommunications synchronization. Artificial intelligence then operates as the coordination layer, optimizing liquidity, automating payments, detecting fraud, and managing distributed financial networks.

The central thesis is that the future of development lies less in transferring resources through aid agencies than in constructing computational infrastructures that provide secure access to global liquidity. Treasury-backed stablecoins, coordinated by AI across Internet-scale telecommunications networks, have the potential to redefine development policy by enabling billions of people, especially the world’s unbanked, to participate directly in the global dollar economy.

References

Heeks, R. (2002). Information Systems and Developing Countries: Failure, Success, and Local Improvisations. The Information Society, 18(2), 101–112.
Mueller, M., Mathiason, J., & Klein, H. (2007). The Internet and Global Governance: Principles and Norms for a New Regime. Global Governance, 13(2), 237–254. This article argues that policymakers fail when they attempt to create rules for Internet governance without first establishing foundational principles and norms.
Sachs, J. D. (n.d.). ICT & SDGs Final Report: How Information and Communications Technology can Accelerate Action on the Sustainable Development Goals.
https://www.oneworld.net/sites/default/files/resources/2016-06/ict-sdg.pdf
Unwin, T. (2009). ICT4D: Information and Communication Technology for Development. Cambridge University Press.
World Bank. (2016). World Development Report 2016: Digital Dividends.
Jack, W., & Suri, T. (2011). Mobile Money: The Economics of M-PESA. National Bureau of Economic Research Working Paper No. 16721.
Congressional Research Service. (2025). Stablecoin Legislation: The GENIUS Act and Federal Regulatory Framework.

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