Stablecoin Payments: A New Opportunity in the Trillion-Dollar Market

Stablecoins, like email based on the Internet, connect global users, forming a new financial operating system that simplifies intermediaries, improves capital efficiency, and brings programmable currency to the global stage.

Original article: Stablecoin Payments: The Trillion Dollar Opportunity

Author: Keyrock, Bitso

Compiled by Will Awang , investment and financing lawyer, focusing on Web3 & Digital Asset; independent researcher, focusing on tokenization, RWA, payment, DeSci

The payments system is undergoing a fundamental transformation. For decades, cross-border transactions have been constrained by outdated infrastructure, with emerging markets bearing the brunt of the burden. The emergence of stablecoins has radically altered this landscape. Just as email was built on the internet, stablecoins connect users around the world, forming a new financial operating system that streamlines intermediaries, improves capital efficiency, and brings programmable money to the global stage.

Before the advent of mobile wallets and cryptocurrencies, the earliest "secure tool" for cross-border payments was traveler's checks, introduced by American Express in 1891. Traveler's checks employed a "double-signature" mechanism to ensure authenticity and were guaranteed by a reputable financial institution. They offered both reliability and liquidity, making them convenient for exchange into local currency or direct spending. In many ways, traveler's checks were the first "borderless currency": portable, mobile, and privately issued.

Stablecoins are an upgraded version of traveler's checks. They are also corporate-backed, offering liquidity and credibility, yet inherently borderless. Their "stateless" nature is unconstrained by a single jurisdiction and naturally interoperable with the fragmented global banking system. Their true potential lies in emerging markets, home to 85% of the world's population but long neglected by traditional financial infrastructure. Stablecoin rails will make payments faster and cheaper, unlocking trillions of dollars in previously overlooked value.

Keyrock and Bitso have witnessed this transformation firsthand: from enabling real-time remittances in Latin America to providing institutional-grade stablecoin liquidity for exchanges and over-the-counter markets. Stablecoins are opening the door to financial inclusion, becoming a native internet alternative to SWIFT, pre-deposited funding, and netting. Individual remittance times are being reduced from days to seconds, treasury management is being fundamentally reshaped, and institutions are embedding stablecoin infrastructure into their core operations.

Therefore, we compiled this stablecoin report "Stablecoin Payments: The Trillion Dollar Opportunity" by Keyrock and Bitso, aiming to deeply explore the full picture of stablecoins as payment rails - from traditional systems to new infrastructure that reshapes the global payment stack. By analyzing its architecture, taking stock of real-world use cases that have been implemented, and the trend that is about to leverage $1 trillion in cross-border transactions, we reveal the revolutionary potential of stablecoins in the global payment field and how they can bring changes to emerging markets.

1. The Great Gap in Global Financial Infrastructure

Fintech innovation relies on reliable financial infrastructure—the so-called “building blocks of fiat currency”: APIs, payment rails, custodians, and compliance providers. In developed markets, these tools are readily available: American entrepreneurs can launch a payment app in a matter of weeks by integrating with Stripe, Plaid, and Visa.

In emerging markets, similar entrepreneurs face a significant challenge. Infrastructure fragmentation, a scarcity of APIs, and the de-risking efforts of global banks have resulted in a severed banking ecosystem. Creating the "next Venmo" is not only more difficult, but structurally impossible. The global financial system is built on a foundation that is inaccessible to emerging markets. Due to this lack of building blocks, entrepreneurs in emerging markets, no matter how creative or ambitious, are often blocked from developing interoperable financial products.

Stablecoins are bridging this gap—not just by speeding up transactions but also by circumventing the structural bottlenecks of legacy infrastructure. But with such an alluring prospect, why will they still account for less than 3% of the $195 trillion global cross-border payments market in 2024?

The simple answer: regulation, liquidity, and poor interoperability with traditional systems. If these three challenges are resolved, stablecoins could account for approximately 12% of global cross-border payments by 2030. Only by peeling back the hood of "how money actually flows" can both opportunities and bottlenecks emerge.

1.1 USD Settlement for Global Payments

Our mission is to digitize value by providing the necessary financial products and infrastructure to unlock the full potential of digital assets. We began by unifying fragmented market liquidity through market making, and now extend this foundation to the OTC and payments sectors. Stablecoins are the first mainstream proof that digitized value can be transferred more efficiently, quickly, and cheaply. We aspire to serve as a bridge between digital and traditional finance.

——Kevin de Patoul, Keyrock CEO

In global payments, the US dollar reigns supreme. Approximately 90% of international trade is denominated in dollars, even when neither party in the transaction involves the US. However, dollar clearing isn't universally accessible: non-US banks must route funds through a small group of correspondent banks in New York (such as JPMorgan Chase, Citigroup, and BNY Mellon). Losing access to any of these banks effectively means being kicked out of the US dollar system.

This vulnerability is further magnified in emerging markets, where access to US dollars can be both crucial and fragile . These markets rely on correspondent banking relationships to access the US dollar system; however, if political risk or compliance concerns arise, major banks will "de-risk" and directly sever correspondent relationships to protect their clearing licenses.

In the long term, we believe every financial institution must support stablecoin infrastructure in some form: wallets, on-chain settlement, tokenized deposits—all on the way. Customer demand is already there, especially in emerging markets where friction with banks is greatest.

——Devere Bryan, CEO of First Digital

This is the new paradigm brought about by stablecoins: they are not just faster and cheaper, but they "flatten" the payment stack - removing middlemen, writing compliance into the code, and achieving instant cross-border settlement.

Stablecoins are not just a new form of money; they are a new model for the movement of money: by minimizing operational friction, reducing compliance costs, and freeing up locked-up liquidity, they create a fundamentally more efficient way to transfer value globally. Their share of US M2 has risen from 0.04% in 2020 to over 1% today; if their current trajectory continues, they could reach 10% of the US money supply by 2030, signaling the rise of a parallel monetary layer.

The future of payment rails lies on-chain. This vision can only be truly understood by contrasting it with the old world that stablecoins are replacing.

1.2 The History of Global Payment Infrastructure: A Layered Legacy

Today's cross-border payments system wasn't designed; it was built over time. For decades, each time a local problem arose, another layer of intermediaries or compliance regulations was added to the old system, ultimately leaving behind a labyrinth of inefficiencies. This outdated system dates back to the early 20th century, when global trade was dominated by a handful of major powers and banking infrastructure was primitive and rudimentary.

Banks faced a fundamental dilemma: how could international remittances be handled without a global network? The workaround was the "correspondent banking" system—a patchwork of bilateral relationships. Banks opened accounts with overseas partners, reconciled accounts using paper ledgers and telegrams, and trusted each other to keep accounts. Surprisingly, this approach still underlies most cross-border payments today.

In the 1950s, telex machines (Telex) replaced telegraphs for transmitting payment instructions. Banks continuously expanded their correspondent banking relationships and operational staff to cope with the surge in cross-border payment volume. However, as late as 1977, 80% of cross-border payments were still processed by mail. While telex increased speed, it required specialized operators and introduced new sources of error in banks' back-office operations.

The system eventually collapsed. While overall trading volume tripled, the backend couldn't keep up. The "paper crisis" of the 1960s led to a surge in errors, the collapse of 160 NYSE member firms, and a push for domestic settlement automation in the United States.

The Eurodollar market exploded in the 1960s and 1970s. American banks expanded rapidly overseas, particularly in London, with the number of London branches increasing fivefold between 1958 and 1974. European banks formed correspondent networks and syndicates to catch up.

To support global expansion, banks have continuously expanded their cross-currency correspondent networks. In 1970, the US launched CHIPS, providing clearing for large dollar payments and facilitating large-scale interbank settlements. However, outside the US dollar system, business as usual remained the same—emerging markets were still reliant on correspondent banks, lacking access to global clearing.

The collapse of Herstatt Bank in 1974 shattered the illusion of global settlement security. The German bank had received Deutsche Marks but, due to time differences, had not yet paid out US dollars, leading to a default and triggering a global reckoning. Consequently, banks began to impose stricter deadlines, add risk management departments, and implement more stringent inspections. Regulators then established the Basel Committee, which laid the foundation for a global prudential regulatory framework.

Almost immediately, in 1977, SWIFT launched, replacing telex with standardized, encrypted messages. But it only solved half the problem: SWIFT only transmitted instructions, not the funds. Settlements still relied on outdated correspondent banking links—though the user interface had been upgraded, the payment channels remained antiquated.

In the 1980s and 1990s, a surge of capital flow encountered a wave of regulation. The United States repeatedly tightened the anti-money laundering (AML) provisions of the 1970 Bank Secrecy Act. The FATF was established in 1989, exporting AML/KYC standards globally. The Bank of England introduced formal KYC in the early 1990s, mitigating risks before they occur, while AML tools focused on post-event monitoring. Each additional regulation added another layer of compliance and complexity.

The side effects of regulation are significant: between 2011 and 2022, correspondent banking relationships in emerging markets declined by 50%. Latin America, Africa, the Caribbean, and the Pacific were hardest hit. Faced with soaring compliance costs and risk exposure, major global banks are opting for de-risking, directly severing ties with entire regions to preserve their dollar clearing channels.

Every transaction can become a liability. Banks must screen against sanctions lists, monitor for suspicious activity, and maintain a complete log of transactions. To manage risk, they employ extensive compliance teams and third-party screening agencies, adding costs and intermediaries to every payment.

In 2002, CLS Bank launched, attempting to address foreign exchange settlement risks and enable simultaneous settlement of both sides of currency pairs. Initially covering seven currencies, it later expanded to 18. However, most emerging market currencies remained excluded; the risks CLS sought to mitigate persisted in much of the world. While real-time payment systems have made rapid progress domestically, they have come to a halt at the border. Without cross-border interoperability, banks still rely on correspondent banks to stitch together local systems.

So we have the system we have today: an international payment may flow through five or more layers of intermediaries—banks, foreign exchange counters, compliance checks, local clearing, and global messaging. Each layer was added to solve a problem, but never replaced the previous one.

This is no accident—this system was created to manage risk in an era without real-time computation, trusted code, and transparency. But these constraints no longer exist. Stablecoins are the next evolutionary step in payment infrastructure.

2. The Operation of the Global Monetary Machine

The global payments system is supported by three traditional pillars:

1. SWIFT: a messaging network for transmitting payment instructions
2. Prefunding: Liquidity deployed in the destination market in advance
3. Netting: Settlement is completed through transaction hedging

Stablecoins compress these three layers into a single programmable track: faster than SWIFT, requiring no pre-deposited funds, and crushing netting and settlement in terms of cost and speed. These implications become clear only by dissecting the operation and shortcomings of the old system.

2.1 The old track under our feet: SWIFT

At the heart of cross-border finance lies SWIFT—a messaging system that allows banks to send instructions to each other. SWIFT itself doesn't move funds; it simply tells banks where to send them. In practice, a simple transfer may involve a chain of correspondent banks, each forwarding the SWIFT message hop by hop until the funds reach their destination. While SWIFT handles international messaging, local rails like ACH, SEPA, and PIX actually move the funds between the two terminals.

In developed markets such as the United States, Europe, and Singapore, a dense network of correspondent banks combined with SWIFT messages allows 90% of payments to reach the beneficiary bank within 1 hour, and 86% only require one intermediary.

This performance is significantly diminished in emerging markets. Limited correspondent banking relationships force payments to take longer routes, leading to steeper delays. Globally, only 43% of SWIFT credit messages reach the final recipient within an hour. A transfer between the US and the UK might arrive in minutes, but to smaller markets in Africa or Southeast Asia, it could take days. Emerging markets often experience processing times that are two to three times longer and transaction costs that are three to eight times higher. Countries like Angola have lost nearly half of their correspondent banking relationships, forcing payments to traverse a longer chain of intermediaries, with settlement delays of five days or more.

Many factors contribute to delays: a deteriorating correspondent banking network, exchange rate fluctuations, and market concentration. But the root cause lies in outdated infrastructure, regulatory friction, and poor integration between local rails and international networks like SWIFT. Instructions are often misrouted or held up for compliance review, with little visibility into where and why these delays occur. This lack of transparency is one reason why more fintech companies are choosing to bypass SWIFT and build their own.

The market opportunity here is enormous. Trillions of dollars in cross-border capital flows are still dominated by the 50-year-old SWIFT network. With stablecoins playing a key role in payment infrastructure, the window for modernization has opened.

— Jack McDonald, Senior Vice President of Stablecoins at Ripple

2.2 The price paid for “speed”: pre-deposit funds

Because SWIFT only transmits messages, payment companies seeking instant payments must pre-deposit funds in local overseas bank accounts. These nostro accounts essentially act as "pre-positioned liquidity." When a user initiates a remittance, the service provider immediately uses the balance in their local account to pay the recipient, completing cross-border fund settlement later.

Remittance companies and new digital banks rely heavily on this model. For example, a US-based remittance agency seeking to provide payments in the yen market would hold a yen balance with a local bank. When a client sends US dollars, the agency immediately disburses the funds from the yen pool and then settles the dollars. Because the funds are already in the destination country, the recipient receives the funds within minutes, bypassing traditional cross-border delays. The remitter's US dollars are then used to replenish the yen pool, typically through batch settlement.

Pre-funding trades capital efficiency for speed: it makes funds available almost instantly, but it forces companies to lock up large amounts of cash in dozens of overseas accounts.

With the atomic settlement of stablecoins, the need for pre-deposited funds can be significantly reduced, or even eliminated entirely. Stablecoins eliminate the need for credit risk on both sides of a transaction, freeing up capital and eliminating one of the biggest inefficiencies in traditional cross-border transactions.

—Arnold Lee, Co-founder and CEO of Sphere Labs

A. Capital inefficiency

As business expands, the operational pressure of pre-deposited funds increases exponentially. A fintech company operating in over 20 countries may need to manage dozens of local currency accounts, each requiring sufficient idle balances to cope with daily fluctuations. To support small remittances (e.g., $1,000), these accounts often hold substantial funds. Once the balance falls below a set threshold, replenishment is necessary, trapping the company in an endless cycle of "recapitalization."

To meet repayment demands in emerging markets, companies are forced to park millions of dollars in local bank accounts. The greater the trading volume, the greater the float required, forcing companies to resort to additional working capital or debt financing to cover their positions. These funds, locked in isolated accounts, effectively become a "capital trap."

Stablecoins are reshaping treasury management for fintech companies. Instead of pre-depositing funds in local accounts, businesses can leverage on-demand liquidity, deploying capital globally in minutes. Operations are now uninterrupted 24/7, eliminating batch processing and weekend downtime. Treasury visibility has evolved from delayed reporting to real-time data, allowing CFOs to instantly track the movement of every penny globally—a feat impossible in the traditional banking system.

— Chris Harmse, Co-founder and CBO of BVNK

An estimated $27 trillion is locked up in pre-deposited nostro/vostro accounts—capital dormant in the global payment system. It can't be loaned, invested, or used productively. To make matters worse, remittance companies often have to pay interest on these idle balances. At a 5% annual interest rate, keeping $1 billion in a nostro account translates to $50 million in lost interest or financing opportunities per year. Industry estimates put the total cost of pre-deposited funds (including labor and administrative fees) at 3–5% annually. This drag isn't just on lost revenue; it also includes:

• Mobility needs for each corridor must be continuously forecast;
• Transfers get stuck when the account balance is insufficient;
• Funds are idle when the balance is too high.

For this reason, leading players such as Wise and Remitly have listed "capital efficiency" as a core KPI.

B. High cost and low turnover

In fiscal year 2024, Wise's annualized capital turnover ratio was only approximately 1.26x, and Remitly's was approximately 2.23x—meaning that every $1 of working capital supported only $1.26 and $2.23 of annual transaction volume, respectively. In other words, Wise needed approximately $0.79 and Remitly $0.45 of float to process $1 of annual transaction volume, highlighting the low capital efficiency of even industry leaders.

The constant replenishment of positions across dozens of local accounts reflects the fragmentation and inefficiency of pre-deposited liquidity. Besides capital occupation, this model forces fintech companies to bear increasing foreign exchange fees, bank charges, and reconciliation costs. Some companies spend millions of dollars annually on reconciliation alone, not to mention the compliance checks on each local account and the management systems for hundreds of sub-accounts.

Although pre-depositing funds can increase the speed of payment to end users, it is costly and difficult to scale.

The legacy pre-deposit model traps capital in idle nostro accounts, creating friction and delays in settlement. It also requires firms to forecast trading volumes in advance, wasting working capital and limiting treasury performance. We provide instant liquidity the moment a trade occurs, enabling T+0 treasury capabilities. Liquidity scales dynamically with actual traffic, and settlement is instantaneous, rather than waiting for days.

— Nkiru Uwaje, Co-founder and COO of MANSA

C. High ledger maintenance costs

To streamline fragmented liquidity and improve operational efficiency, many fintech companies are using For Benefit Of (FBO) custodial accounts: pools of funds held on behalf of multiple end clients by a centrally managed financial intermediary. Within this pool, companies can allocate virtual sub-accounts to clients, while the underlying funds remain under the control of the bank.

However, banks lack visibility into individual customer balances in FBO accounts and rely entirely on fintech companies to maintain accurate ledgers. In emerging markets, this lack of transparency discourages banks from investing in FBOs, fearing record-keeping chaos and increased difficulty in anti-fraud oversight.

Managing hundreds of virtual sub-accounts within a single FBO pool requires fintech companies to have robust ledger systems and real-time transaction monitoring. Without these systems, reconciliation of concurrent transactions is prone to errors, leading to fund mismatches and manual remediation. Synapse's bankruptcy filing in April 2024 is a prime example of this risk: over 100,000 customers had $265 million in deposits frozen due to a ledger failure that resulted in a shortfall of $65-95 million.

While FBO accounts offer efficiencies, they also come with significantly higher startup and operating costs: advanced ledger tools are required; complex reconciliation processes must be managed; and ongoing operational expenses incur. Reconciliation alone can cost millions of dollars annually, not to mention the hidden costs of building and maintaining proprietary ledger systems.

2.3 Netting and Clearing: The Silent Engine Behind Institutional Payments

If SWIFT and pre-deposited funds support most retail cross-border payments, then the third mechanism - netting - quietly supports institutional finance.

Netting works by offsetting claims and liabilities against each other, ultimately settling only the net difference. Instead of settling each payment in real time, banks accumulate payment instructions throughout the day and settle the net balance at the end of the day (or at a specified time), typically through a central bank or clearing house. Netting significantly reduces liquidity requirements: banks only need to maintain sufficient funds to cover their "net outgoing" positions, rather than holding the full amount for each payment. However, this efficiency comes at the cost of time delays and reliance on a central coordinator—settlement often occurs in batches at the end of the day.

The diagram below illustrates a scenario where the system could become “deadlocked” if participating banks were unable to complete each payment due to insufficient funds. Such bottlenecks typically require intervention by the central bank.

The traditional netting mechanism has several technical and operational limitations:

1. Relying on a single central institution to calculate net amounts and enforce settlements, if that institution fails, the entire system will come to a halt.
2. The entry threshold is extremely high, and only licensed banks (and a very small number of large non-bank institutions) can join, and the vast majority of fintech companies are excluded.
3. The process is opaque, and outsiders have little visibility into how payments are prioritized and when they are settled.
4. With deferred tranches, interim risk arises if a bank fails before final settlement.

To address these structural flaws, central banks around the world are actively exploring ways to upgrade interbank clearing. Over 90% of central banks are researching or piloting central bank digital currencies (CBDCs) to improve the efficiency of cross-border and institutional payments. Collaborative projects such as Project Mariana and Jasper–Ubin have tested the use of blockchain to achieve decentralized foreign exchange settlement and more granular netting mechanisms.

Project Mariana's architecture connects central banks' domestic platforms to a shared network through a "bridge," aggregating multiple currencies into a unified AMM pool. Leveraging atomic PvP (Payment-Versus-Payment) on a common layer, it achieves real-time coordination and liquidity efficiency without the need for batch netting. While traditional netting relies on centralized clearinghouses, Mariana heralds a shift toward a decentralized yet equally efficient infrastructure. These projects reflect a broader consensus: netting is crucial for liquidity management, but the existing centralized model suffers from significant shortcomings in accessibility and transparency.

Ripple was founded on a vision to make money flow as freely as information. This isn't just talk—banks around the world use our technology every day to deliver real results in the global economy.

— Jack McDonald, Senior Vice President of Stablecoins at Ripple

3. Stablecoins 101

Before we compare stablecoin payment rails to traditional infrastructure in Part 4, we need to first understand what stablecoins are: how they maintain price stability, how issuers make profits, and to what extent they have expanded.

These fundamentals determine how stablecoins actually operate, explain why users trust them, and reveal the business incentives behind their rapid growth. More importantly, their growing share of the U.S. Treasury market signals that stablecoins have become a new player in the monetary system.

"The ever-expanding internet financial system is upgrading traditional payment rails. Stablecoin transactions, such as USDC, enable near-instant, secure, and global capital flows across previously fragmented networks. By August 2025, USDC's circulation had nearly doubled, exceeding $64 billion. Frictionless value exchange is no longer theoretical; it's happening in real time."

— Claire Ching, Vice President of Global Capital Markets at Circle

3.1 The rise of stablecoins

Stablecoins are tokens pegged to fiat currencies, aiming to combine the stability of the US dollar with the programmability of cryptocurrencies. The first wave of stablecoins, such as BitUSD and NuBits, emerged in the mid-2010s. They relied on crypto-asset collateralization or algorithmic mechanisms to maintain their dollar pegs. Both ultimately failed: BitUSD fell below $1 in 2018, and NuBits plummeted to a few cents, highlighting the difficulty of maintaining stability without diversified or robust reserves.

In 2014, Tether (USDT) launched with a fully fiat-collateralized model, claiming that each USDT was backed 1:1 by US dollars. In 2017, Binance, rising to become a top global exchange, established USDT as its primary denominated currency, marking a turning point in USDT's explosive growth. Faced with regulatory barriers to USD access, offshore exchanges adopted Tether as a de facto alternative to the US dollar, creating a network effect: the more exchanges and traders adopted USDT, the more it became the default unit of account in the crypto market.

In 2018, Circle launched USDC, positioning it as a transparent, global stablecoin. USDC is 100% backed by highly liquid cash and cash equivalents and redeemable 1:1 against US dollars. It is certified monthly by a Big Four accounting firm and prioritizes compliance. With its transparent governance and compliance track record, USDC has become the stablecoin of choice for many businesses in payment applications, treasury tools, global settlement infrastructure, and other on-chain projects.

3.2 Flow of Value

Who has the right to mint or redeem stablecoins directly influences liquidity, trust, and the peg mechanism. Only authorized institutions (exchanges, fintech companies, payment platforms, etc.) that have completed the issuer's Know Your Customer (KYC) can mint through a dedicated portal. Once approved, the institution remits US dollars to the issuer, who then mints an equivalent amount of tokens on-chain.

Once minted, stablecoins circulate like regular tokens on public blockchains, typically adhering to standards like ERC-20 (Ethereum) or SPL (Solana). When transferring funds, users sign the transaction with their private key, specifying the recipient address and amount. The transaction is broadcast to the network, verified by nodes, and recorded in the ledger. Crucially, transfers require no centralized intermediary. Token balances are adjusted directly within the smart contract's internal ledger. For example, if Alice transfers 100 USDC to Bob, the USDC contract simply decrements Alice's on-chain balance and increases Bob's, without requiring any off-chain movement of the underlying collateral.

“The most successful stablecoins will be ‘boring’ — regulated, transparent, and well-collateralized. Institutions want predictability, and that’s the market segment we’re building.”

——Devere Bryan, CEO of First Digital

3.3 Benefits of Anchoring

Rather than keeping every dollar they receive idle in reserves, some stablecoin issuers invest a portion of it in low-risk, highly liquid instruments, such as short-term U.S. Treasury bonds or overnight repurchase agreements.

It should be noted that after the GENIUS Act of 2025 is signed into law, the law explicitly prohibits US-regulated stablecoins from paying interest or income to holders. Therefore, it will become standard practice for the issuer to retain treasury bonds or reverse repurchase interest to support operations, risk management and long-term sustainability.

Ondo's original mission was simple: to make fundamental assets like U.S. Treasuries accessible to global investors. We were one of the first teams to bring Treasury tokenization to blockchain, with a total locked-in value exceeding $1.4 billion, placing us at the forefront alongside BlackRock and Franklin Templeton. Through Ondo Global Markets, we've expanded our mission to include tokenized access to over 100 U.S. stocks and ETFs.

— Ian De Bode, Chief Strategy Officer, Ondo

The scale of stablecoins is already having a macroeconomic impact. BIS researchers estimate that for every $3.5 billion increase in stablecoin supply, the three-month U.S. Treasury yield falls by 2.5–5 basis points. As issuers continue to channel funds into short-term Treasury bonds, they have become active participants in the yield curve, providing a new transmission mechanism for non-bank liquidity to influence money market rates and, in turn, Federal Reserve funding conditions.

There are a lot of dollars circulating today that yield nothing. If even a small portion of them shifted to interest-bearing assets, it could completely change demand for short-term Treasury bonds and drive down their yields. We're just beginning to see this effect, but it will spread quickly.

— Stefan George, co-founder of Gnosis Pay

Stablecoins will reshape monetary policy. When their issuance reaches $2 trillion, they could hold nearly 25% of the short-term Treasury market, directly influencing Federal Reserve policy and front-end yields. More notably, major stablecoin issuers currently hold more U.S. Treasuries than countries like South Korea, Germany, and Saudi Arabia, ranking them the 17th largest holders globally. Their presence is already generating real demand at the short end of the yield curve.

4. Stablecoin Payment Stack

Having established what stablecoins are, how they anchor value, and why they have become so relevant, we turn to a more fundamental question: How do they actually “flow”? Viewing stablecoins as monetary instruments is only half of the puzzle; to understand their full impact, we must delve deeper into the infrastructure that supports their operation as payment rails.

This palm strike focuses on this infrastructure. We'll begin with two core primitives: the " stablecoin sandwich model " and " USD Virtual Accounts "—they enable users to send, receive, and hold US dollars outside the traditional banking system. We'll then explore how stablecoin platforms evolve into full-stack payment networks: within a single system, users can save, spend, earn interest, and instantly send money. This shift is significant because it reveals that the real revolution lies not just in what money is, but in how it moves, who controls it, and where improvements to the legacy stack lie.

4.1 The Magical Uses of Virtual Accounts

Stablecoin rails allow users to skip several steps in the legacy payment stack, thereby strengthening and improving the existing payment system. In the process, they eliminate layers of intermediaries and build a more unified and complete financial infrastructure from currency issuance to point-of-sale.

As stablecoins move from their initial transaction scenarios to mainstream payments, stablecoin payment companies are also simultaneously upgraded to comprehensive payment networks: directly reaching consumers and completing deposits, spending, earning, and remittances on one platform.

Before we delve into how payment companies are evolving and the stablecoin value capture stack, let’s first introduce the foundation that makes it all possible - the “stablecoin sandwich model” and US dollar virtual accounts.

The "stablecoin sandwich" model simplifies cross-border payments using three layers: local fiat currency at one end, a stablecoin as a transfer medium in the middle, and exchange back to the target fiat currency at the other end. It replaces the intermediary layer traditionally handled by correspondent banks with a minimalist bridge:

1. Deposit: The remitter converts local fiat currency (such as USD) into stablecoin (such as USDC);
2. Transfer: Transfer the stablecoin to the recipient address or "virtual account" on the chain;
3. Withdrawal: The recipient converts the stablecoin into local fiat currency (such as BRL) and withdraws it or uses it directly.

To make this model more accessible, scalable, and compatible with the banking system, companies have layered on top a “stablecoin virtual account”—a digital dollar account that functionally mimics a U.S. bank account but runs entirely on the stablecoin infrastructure.

We've been using the stablecoin sandwich model with PSPs like dLocal for years. Now evolving is the "orchestration layer": Layer 1 automatically orchestrates transactions between wallets, deposit and withdrawal channels, trading venues, and banks. As more assets become tokenized, this coordination layer will become essential. While stablecoins will gradually replace local rails, short-term transactions will still rely on fiat currency, making orchestration capabilities central to scalability.

— Chris Harmse, Co-founder and CBO of BVNK

BVNK was one of the first companies to implement this model, combining stablecoins with named, non-custodial virtual US dollar accounts, allowing users to seamlessly convert between fiat and stablecoins. Virtual accounts offer a key benefit to banks: through self-custody, they bypass the local banking system and reduce their exposure to any one jurisdiction.

This model eliminates reliance on local or correspondent bank USD deposits. Because stablecoins remain outside the banking system until settlement is actually needed, users avoid latency, transparency issues, and compliance burdens. Funds remain always accessible and pre-positioned, while fewer intermediaries significantly improve traceability and reconciliation efficiency. Virtual accounts allow any wallet to function as a bank account.

This model is simpler for banks: they only need to process local deposits and withdrawals. Once funds are converted into USDC issued by a regulated issuer, the bank is no longer required to handle cross-border transactions. There are no chargebacks on-chain, and custody, anti-money laundering/sanctions, and travel rule obligations fall to the issuer or VASP. Case studies have shown that this can substantially reduce banks' cross-border compliance workload by 50–90% .

The impact is particularly profound for entrepreneurs in emerging markets. In the past, applying for a US EIN and opening a business account could take up to six weeks; now, with a US dollar virtual account, one can open an account in minutes. USDC deposits are instant, while fiat deposits are processed through separate clearing channels. More importantly, these accounts open the door to developed markets: US e-commerce platforms like Amazon require merchants to provide a named US dollar account that matches their registered information and accepts ACH. Virtual accounts make this possible across borders, eliminating geographical restrictions and making all markets accessible.

4.2 Mastering the entire stablecoin chain

Stablecoin payment platforms are evolving beyond the "sandwich" model to become fully-fledged payment networks: users can spend, save, and earn interest directly within their native stablecoin accounts. These networks are capable of monetizing every layer of the stablecoin stack—issuance (treasury), network activity (transaction fees), capital markets (DeFi yield), and end-use services (consumer applications)—while simultaneously delivering more value back to users.

The trend is clear: stablecoin payment companies are evolving into full-stack financial networks. Stripe's recent acquisition is a sign of this. SphereNet is building on the same idea: a shared ledger for regulated payment institutions, providing a new backbone for interoperable and compliant payment infrastructure.

— Arnold Lee, co-founder and CEO of Sphere Labs

Companies like Stripe are positioning themselves to control the entire stablecoin value stack. Since issuers capture the largest economic gains, platforms like Bridge have enabled fintech companies to launch their own stablecoins (like USDB), thereby capturing fees across the entire payment process.

This shift explains why major fintechs are issuing their own stablecoins: programmable money allows them to control the entire payments stack, simplify reconciliation, and generate revenue, while leveraging existing channels (such as Revolut’s 50 million active users). Stablecoins are entering a new phase of vertical integration: early pioneers face increasing competition from established institutions with scale and reach.

The biggest opportunity lies in attracting real users and establishing effective distribution channels. The crypto world has always excelled at innovation, but distribution is our Achilles' heel. This is precisely where centralized exchanges like Coinbase and Binance are winning.

— Stefan George, co-founder of Gnosis Pay

This transformation is already happening across the entire stack:

1. Stablecoin issuer: Circle (through the Circle Payments Network) is no longer limited to issuing coins, but is building an orchestration network to facilitate transaction routing and settlement between members.
2. Payment Orchestrator: BVNK (Layer 1) builds a blockchain system that connects PSPs, banks, and wallets to the same network.
3. Payment-specific chain: Sphere (Spherenet) also approaches end users and deeply cultivates the payment stack.

Sphere Labs' internal data and Messari data show that its payment volume in long-tail markets has increased 20x year-over-year. By targeting high-inflation and underserved regions, Sphere provides instant USD settlement and redemption, reducing foreign exchange costs and the risk of chargebacks.

5. How do stablecoins bridge the traditional payment system?

As the stablecoin infrastructure gradually takes shape, we can finally return to the core question: Can these new rails truly surpass the legacy systems they are intended to replace? As we've seen, traditional cross-border payments rely on a web of intermediaries, including SWIFT, pre-deposited funds, and centralized netting, leading to slow settlement, capital accumulation, and fragmented global capital flows.

Part 5 explores how stablecoins directly address these pain points: transforming static liquidity into high-speed working capital, replacing batch netting with smart contracts, and providing a radically different architecture. What once required multiple layers of coordination between SWIFT, pre-deposited funds, and clearing houses can now be accomplished through code, transparency, and composability.

5.1 Bridges between debris tracks

The goal of a stablecoin payment rail is to inherit the advantages of SWIFT, pre-funded payments, and netting, while also stripping away its biggest flaws. Just as every fintech company eventually adopted SaaS tools, every company in the future will also adopt stablecoin infrastructure—from wallets to treasury operations to revenue management.

Traditional cross-border payment systems often clash with SWIFT's often choppy local rails, necessitating manual "connections" at national borders. In contrast, stablecoins move value directly from sender to receiver, point-to-point, without the need for a chain of correspondent banks.

Stablecoins act as a universal translator for currencies. They simplify the "last mile" of fiat currency conversion by directly connecting to local payment systems. Rather than building dozens of bilateral interfaces, stablecoins serve as a shared layer, enabling instant, two-way interoperability between local rails and global financial networks.

BVNK research shows that for large-value payments (€100,000 or more), stablecoin settlement speeds are 3–5 times faster than SWIFT, at one-tenth the cost. Another major advantage is end-to-end transparency: the shared, internet-native value rail reduces reliance on correspondent banks and manual cross-border transactions, allowing any participant—bank, fintech, or crypto wallet—to transact directly.

BVNK initially helped businesses send and receive stablecoins through a simple API, and we handled the underlying licensing, liquidity, and banking channels. We now recognize the market need for more modular, self-managed infrastructure, leading us to launch Layer 1. The core challenge we seek to solve is orchestration. The future will not be one chain or one stablecoin, but multiple networks connected by a smarter orchestration layer.

— Chris Harmse, Co-founder and CBO of BVNK

Stablecoins are not replacing local rails like ACH, Brazilian PIX, or Indian UPI, but are becoming the “connective tissue” between them. Instead of requiring every retail user to exchange fiat for USDT, global platforms can use USDT to complete cross-border settlements between local endpoints.

Some believe stablecoins compete with banks. The truth is quite the opposite: banks provide fiat rails, custody, and compliance—all essential needs; stablecoins offer speed and programmability. When the two combine, magic happens.

——Devere Bryan, CEO of First Digital

In this role, stablecoins are more like the Stripe or Plaid of a global value layer—a developer primitive for orchestrating payments between disconnected systems. They are not just assets, but also infrastructure, and increasingly, even units of account.

Unlike SWIFT, where each correspondent bank handles compliance independently, stablecoins can have compliance built into their code. Platforms can embed identity verification, blacklist screening, and even enforce spending limits through smart contracts within transaction flows, automating regulatory requirements on-chain.

Through SphereNet, we are building a shared ledger for regulated entities, with compliance and KYC shared directly built into the protocol layer. Privacy and confidentiality are also critical—the system must meet the high standards of financial institutions while delivering the speed and efficiency of stablecoin settlement.

— Arnold Lee, co-founder and CEO of Sphere Labs

Just as VoIP allows voice calls to be transmitted over the internet, stablecoins allow fiat currencies to flow online like data packets. This doesn't mean banks or local systems will disappear; on the contrary, stablecoins can extend and connect them. Over time, banks may even integrate stablecoins into their own domestic infrastructure.

5.2 Improving working capital utilization

Stablecoin rails not only address SWIFT's speed and interoperability gaps but also provide an alternative to pre-deposited funds. Fintech companies no longer need to lock up capital in overseas accounts, but can instead access on-demand liquidity through stablecoins. Several leading companies have already implemented this approach.

MANSA is a prime example, providing revolving stablecoin credit, eliminating the need for institutions to pre-deposit funds for each market. For example, a fintech company needing to pay $1 million in Brazil could withdraw USDT directly from MANSA, transfer it to a local partner on-chain in seconds, convert it into Brazilian real, and repay the USDT balance. This effectively provides a short-term working capital channel synchronized with the settlement cycle.

The resulting capital efficiency is astonishing: since each stablecoin loan is typically repaid within a few days, the same funds can be recycled repeatedly. In 2025, MANSA disclosed an average monthly capital turnover rate of approximately 11x—$1 on the platform supports $11 in payments per month, while traditional remittance institutions often have an annualized turnover rate of only 1–2x.

Stablecoin rails enable higher capital turnover by eliminating idle capital and batch settlement delays. The old model forced clients to over-reserve liquidity, leaving millions of dollars dormant in nostro accounts. With T+Now capabilities, the same funds can be recirculated 5–10 times more effectively, deployed only when needed and recovered within seconds after settlement.

— Nkiru Uwaje, Co-founder and COO of MANSA

The core of high turnover is "zero idleness": funds are disbursed on-chain within minutes, then recovered with fiat currency within 1-3 days and quickly loaned out. To date, there have been zero credit defaults among participants, and risk is managed through extremely short duration and real-time credit extensions based on real-time transaction data and expected receivables.

Unlike legacy systems that rely on static, estimated capital allocations, stablecoin rails allow us to scale liquidity in real time based on actual trading volume. This allows fintech companies to meet liquidity needs at nearly 100% capital utilization, resulting in a step-change improvement in return on investment (ROA)—supporting greater scale with less capital or expanding without increasing working capital.

—— Nkiru Uwaje

Arf has taken a similar approach, partnering with Huma Finance to withdraw funds from its stablecoin liquidity pool. Arf's Huma pool currently generates over $250 million in credit each month. While still small in the overall market, it clearly demonstrates the strong demand for credit on the receivables chain.

By the end of 2024, Arf had expanded its loan book from $50 million in January to $250 million, a 400% increase, with virtually no increase in working capital, while maintaining an annualized capital turnover ratio of 56. This highlights a key advantage over pre-funded lending: growth is no longer accompanied by balance sheet expansion.

These returns aren't speculative, but rather come from short-term receivables financing tied to real businesses; even with market fluctuations, cash flow persists. They solve a real problem: remitters need working capital before fiat arrives. As stablecoin credit expands, DeFi pools not only broaden capital sources but also pass on more of the spread to liquidity providers rather than traditional intermediaries.

We believe fintech companies will increasingly turn to the DeFi lending market: on-chain pools match receivables using programmatic logic, allowing companies to access stablecoin liquidity on demand and automatically repay upon receipt of fiat currency. This not only meets real-time payment needs but also avoids idle float. Even if large funds become the primary holders of stablecoins in the future, they can still provide funding to the pools; the platforms will still succeed through neutral access, transparent data, programmable limits, and 24/7 cross-corridor settlement. Stablecoin credit networks transform liquidity management from a static, high-cost approach to a dynamic, on-demand service.

Rather than sitting around with $100 million in accounts around the world, fintech companies can simply maintain a small buffer and readily access the pool's capacity, paying for it as needed. While yields will be compressed as institutional capital pours in, the structural advantage lies in market design, not who provides the capital.

5.3 The never-ending clearing house

The stablecoin rail redesigns netting and settlement. On-chain, "message is settlement": tokens are transferred instantly upon confirmation of the order. This unlocks programmable netting mechanisms, surpassing traditional systems in speed, accessibility, and privacy.

For example, multiple parties can aggregate transfers into a single smart contract, settling only the net difference. Each party submits a payable commitment, and the contract automatically calculates the net position, triggering the necessary stablecoin transfers. Because it operates on a decentralized network, any fintech or bank can participate, eliminating the need for central bank involvement.

Using zero-knowledge proofs, participants can prove to the contract that their net positions are accurate and compliant, while keeping payment details secret. This allows even parties that don’t trust each other to safely net out their positions – unlike the current system, where a central bank must review every transaction.

Stablecoins are evolving into real-time strategic engines: liquidity is available 24/7, cash can be deployed instantly, and exchange rate exposure can be hedged natively on-chain. Processes that once took days are now continuous, programmable, transparent, and globally accessible—a fundamental evolution in financial management.

— Caio Barbosa, founder of Lumx

Blockchain netting isn't limited to end-of-day batches; it can run continuously or be triggered on demand. This flexibility reduces intraday credit risk and accelerates capital turnover. Compared to traditional clearing houses, stablecoin-based netting acts like a perpetually moving wheel, balancing capital flows in real time.

Netting rules on stablecoin rails are transparent and programmable: anyone can review the smart contract code to understand how net positions are calculated and how settlement guarantees are enforced. This stands in stark contrast to the traditional system, where trust is limited to the black-box algorithms of the clearing house.

Stablecoin rails replace closed, opaque processes with open, secure protocols. Institutions no longer need to establish proprietary interfaces with each other; just as email runs on the internet, everyone accesses the same shared network. This "universality" is the real breakthrough.

6. The Real Implementation of Stablecoin Payments

In Part 5, we explored how stablecoins offer an internet-based alternative to traditional systems like SWIFT, pre-funded settlements, and netting. But to gauge the true impact of this new architecture, we must ask: where does it actually take root?

The market capitalization of stablecoins has expanded from $4 billion in January 2020 to over $250 billion today; annual cross-border payment settlement volume reaches $72.3 billion, accounting for only about 1% of the total stablecoin trading volume of $7.4 trillion, but this 1% is expanding rapidly, marking a transition from speculative flows to real economic utility.

From January 2023 to February 2025, traceable stablecoin payments across consumer-to-consumer (C2C), business-to-business (B2B), business-to-consumer (B2C), card payments, and pre-funded scenarios totaled $92.4 billion. While still small relative to the overall payments market, it is growing rapidly, and the trend is becoming increasingly clear.

We're still in the early stages of understanding the potential of stablecoins in payments. They're open standards, allowing banks to issue their own or adopt existing ones. And because they all run on interoperable blockchains, the space for innovation is incredibly flexible. Instead of being driven top-down by a single giant or legacy alliance, banks themselves can lead disruption from the bottom up.

— Kirill Gertman, Founder and CEO of Conduit

Data reveals that the end of 2023 is a key turning point: the use of B2B and card stablecoins surges, with total monthly payments jumping from less than $2 billion to more than $6.3 billion in February 2025.

• B2B monthly payment volume soared from $120 million in January 2023 to over $2.7 billion in February 2025, a 2,400% increase.
• Card-based stablecoin transactions grew 375% over the same period, from $231 million per month to nearly $1.1 billion.
• C2C, which once comprised the bulk of transaction volume in early 2023, has seen its share decline, with B2B becoming the largest segment.

The views of global financial leaders are also shifting. Ripple's "Stablecoin Trends in Business and Beyond" report shows that 56% of executives surveyed believe stablecoins will have the greatest impact on "supplier/vendor payments," 55% are optimistic about "consumer-to-business payments," and 30% believe "treasury management" will also be reshaped.

Stablecoins are redefining how value flows, with new use cases emerging every day. Beyond cross-border payments, we see significant opportunities in global payroll, foreign exchange, trade finance, and digital entertainment. By 2025, we expect strong growth in remittances, gaming, import/export, and companies expanding into emerging markets.

— Ben Reid, Head of Stablecoins at Bitso Business

If the current growth trajectory continues, total annual stablecoin payments across consumer-to-consumer (C2C), business-to-business (B2B), and card payments will approach $1 trillion by 2030, driven primarily by explosive adoption by institutions in these sectors. What began as a peer-to-peer money transfer tool is rapidly evolving into a global settlement layer for fintechs, merchants, and payment providers.

This section focuses on three real-world scenarios:

1. Business-to-Business (B2B)
2. Consumer-to-consumer (C2C)
3. Card transactions

These three sectors can most clearly demonstrate how stablecoins move from "crypto-native traffic" to "mainstream payment activities."

We conclude with "Onchain FX." Although its application is still in its early stages, it addresses the fundamental pain point of cross-border payments: currency exchange. Onchain FX redesigns this layer from first principles. While still in its infancy, it has the potential to fundamentally reshape how funds flow across currencies and borders.

6.1 Capital Transfer: B2B Payments

B2B payments are the transfer of funds between businesses and external parties, including suppliers, service providers, government agencies, and even individuals. By 2027, the average medium-sized company will complete over 1,400 domestic payments annually, demonstrating the significant operational burden.

Although B2B stablecoin applications are still in their early stages, their annual payment volume is already approximately US$36 billion, accounting for only about 0.02% of global B2B payments, but accounting for about 50% of the current total stablecoin payment traffic, becoming the fastest growing sector.

For many companies, the first wave of impact from stablecoins hit directly in their own backyard: treasury management. Treasury management has long been plagued by balances scattered across dozens of accounts, currencies, and legal entities; liquidity gaps and opaque revenue structures; and manual reconciliations, paper checks, and long payment terms.

This section focuses on two key scenarios: real-time treasury operations and supplier settlement.

When we founded Bitso in 2014, crypto was still an experimental field: Bitcoin was less than $1,000, Ethereum hadn't even launched yet, and few believed in it. Today, Bitso is a leading crypto-finance platform in Latin America. Our B2B service, Bitso Business, serves over 1,900 institutions, using blockchain technology to help businesses send, receive, and exchange local currencies faster, more cost-effectively, and in compliance with regulations.

— Daniel Vogel, Co-founder and CEO of Bitso

Despite decades of optimization, B2B payments remain expensive: for every $1,000 transferred, businesses still incur $14–150 in intermediary bank fees and exchange costs. For every $1,000 in revenue, they incur an additional $0.32 in treasury operating costs. And this represents only the tip of the iceberg of overall treasury costs.

One reason for these high costs is the highly manual nature of the process—98% of the payment process still requires human intervention. Paper checks still account for 31% of all payments, can take up to three weeks to clear, and cost $13–40 per check.

From a B2B perspective, corporate demand for stablecoin payments is strong. The obstacle isn't technical, but rather unclear regulation. Businesses need a clear framework that outlines what's compliant and what's not. Combined with military-grade security, these companies need the confidence to migrate from traditional systems to blockchain solutions.

— Caio Barbosa, founder of Lumx

Stablecoins automate escrow, conditional payments, and invoice settlement, significantly reducing the industry average of 59 days' sales outstanding (DSO). Furthermore, through real-time ERP-synchronized wallet orchestration, manual and reconciliation costs are reduced. Compliance (OFAC, KYB/KYT, and the Travel Rule) can be directly embedded into transaction flows, and governance is enforced through smart contracts with programmable roles, locks, and rate limits.

6.1.1 Real-time Treasury Management

Multinational companies often spread their cash across dozens of accounts, currencies, and legal entities, which not only limits profits but also stagnates working capital; emerging market currencies have poor liquidity and cash pool operations are cumbersome.

Meanwhile, fintech and small and medium-sized enterprises (SMEs) are leaving billions of customer deposits in banks without providing any returns: 21% of US commercial deposits (US$3.85 trillion) earn zero interest. Based on a 4% savings rate, this translates to US$154 billion in potential profits being taken away by banks for free. This old model allows financial institutions to become the biggest winners, rather than the real economy, which creates true value.

The stablecoin model radically changes this dynamic. Businesses can now hold their reserves directly in interest-earning stablecoins (such as tokenized treasury bonds or money market funds), automatically earning interest while using the same tokens to pay outlays, payroll, and vendor settlements—without batches or deadlines. We expect these balances to continue to flow into stablecoins over time, capturing higher yields until traditional financial institutions also offer interest on their stablecoin balances. To date, over $600 million has been distributed directly to users in interest-earning stablecoins.

Even large corporations are starting to follow suit. Sony revealed at its investor day that it plans to issue an internal stablecoin for internal settlements and to generate interest on idle cash reserves. The logic is simple: if email can be sent and received globally in real time, why can't money?

This advantage has been proven in markets with volatile exchange rates. For example, in Colombia, when the peso-dollar exchange rate plummeted below 900:1, the OpenYield platform allowed users to hold USDC and earn on-chain real-money returns, with an annualized interest rate of up to 6%, compared to just 0.4% for local bank USD checking accounts. The chart below clearly shows that while holding $1,000 worth of Colombian pesos saw a significant depreciation during that period, the same $1,000 worth of USDC on the OpenYield + Littio platform not only maintained its value but also continued to earn interest.

6.1.2 Supplier Settlement

In addition to treasury optimization, stablecoin rails can also unlock real monetary benefits in supplier settlements, particularly for importers and exporters, logistics companies, and small and medium-sized enterprises that frequently engage with overseas partners. These businesses are often exposed to exchange rate fluctuations, bank fees, and settlement delays.

Stablecoins simplify the process into a “peer-to-peer” three-step process:

1. The payer directly sends USDC (or other stablecoins);
2. The recipient cashes out locally through an exchange, deposit and withdrawal API, or a bank partner;
3. The payer does not need to open a local account in the supplier's country, nor does it need to advance funds in the nostro account.

Conduit exemplifies this B2B infrastructure: connecting local payment rails across countries to a unified on-chain payment layer. The platform processes payments between stablecoins and local currencies at a cost 22% lower than traditional solutions. Brazilian businesses using euros have seen their settlement times reduced by over 500 times, saving thousands of hours of clearing time annually.

At Conduit, we see stablecoins as a game-changer in cross-border payments, potentially even replacing SWIFT. We've partnered with Braza in Brazil to enable users to mint Brazilian reals into stablecoins and convert them instantly into USD or EUR stablecoins, with settlements occurring in minutes, compared to days.

— Kirill Gertman, Founder and CEO of Conduit

For finance teams managing cross-border transactions, the value proposition is clear: instant settlement, transparent pricing, and programmable money, all at a fraction of the cost of traditional methods. The question for businesses is no longer “if to integrate stablecoins,” but “how quickly can we deploy them?” to stay ahead in an increasingly digital global competition.

6.2 Money Will Find a Way — C2C Scenario

Stablecoin rails are also reshaping person-to-person (C2C) transactions, including cross-border remittances for family living expenses, tuition fees, or emergencies. In 2024, low- and middle-income regions received approximately $685 billion in remittances, with South Asia ($207 billion), Latin America ($163 billion), and East Asia and the Pacific ($136 billion) being the largest recipients.

We're not targeting the US market—it's crowded, expensive, and saturated. We're focusing on emerging markets like Latin America, Southeast Asia, and Africa, where cryptocurrencies are truly useful, not just speculative. This is where Gnosis Pay's biggest opportunity lies.

— Stefan George, co-founder of Gnosis Pay

Despite annual remittance volumes reaching into the hundreds of billions, stablecoin penetration in these corridors is still in its early stages, but its growth is impressive. The chart below tracks the monthly multi-chain transactions of major local stablecoins in Southeast Asia (Singapore's XSGD, Indonesia's XIDR, and Vietnam's VNST): from just 2,920 in January 2022 to approximately 70,000 by June 2025. While still dwarfed by traditional remittance volumes, the consistent month-over-month growth suggests adoption is on the rise.

In the past, exchanging USD for long-term currencies required multiple layers of intermediaries and days of delays. Now, FDUSD is instantly interchangeable for PHP or IDR, offering greater transparency and lower costs, unlocking significant efficiency gains for payment processors.

— Devere Bryan, General Manager, First Digital

As remittance costs remain high, local stablecoins are expected to continue to expand—not only as an alternative to expensive remittance corridors, but also as a practical tool for daily consumption: while users prefer to receive US dollars, they still settle daily expenses in pesos or Indonesian rupiah. Local currency-denominated stablecoins fill this gap. As liquidity, integration, and withdrawal channels improve, the adoption of local stablecoins is expected to accelerate.

On average, the total cost of remitting $200 is approximately 6.3%; remitting $500 is approximately 4.3% . These costs include service fees (bank, Western Union, etc.) and exchange rate markups. In practice, the exchange rate offered by the remitter is often worse than the market rate, and the difference represents profit. In most corridors, the exchange rate markup accounts for approximately 35% of the total cost, rising as high as 80% in some emerging markets.

The fee structure of traditional remittance channels once again highlights their inefficiencies: For a $200 transfer, for example, banks charge the highest fees, approximately 12.66%; traditional money transfer operators (MTOs) charge approximately 5.35%; and mobile operators charge approximately 3.87%. In contrast, stablecoin platforms are able to significantly lower these fees. For example, the USDC deposit and withdrawal channels offered by the Coinbase Developer Platform are completely fee-free, while other gateways like MoonPay charge fees as high as approximately 4.5%. These fees continue to decline as competition intensifies.

Actual case:

• BCRemit (serving Filipino workers) reduces total costs (fees + remittance) to just over 1% and avoids the expensive short-term loans that traditional institutions are forced to use.
• Sling Money allows users to top up their "virtual accounts" and exchange currency at the real-time mid-rate with no hidden spreads. Deposits are charged just 0.1%, compared to around 13% for a $200 bank transfer. Funds are converted internally to the USDP stablecoin and transferred globally within 1 second, free of charge.

Stablecoin rails have brought orders of magnitude improvements to remittance economics: costs have been reduced by 1/4–1/13, and settlements have been shortened from days to seconds. This efficiency boost has forced traditional giants to adapt—established remittance companies like M-Pesa have already incorporated compliant stablecoins (such as USDC) into their product suites.

Bitso is building payment rails around emerging markets: we launched MXNB, pegged to the peso, and launched BRL1 in Brazil. By 2024, Bitso Business will have processed over $12 billion in cross-border payments, enabling global companies to serve Latin America with lower fees and faster settlements.

- Imran Ahmad, General Manager of Bitso Business

Bitso holds over 10% of the US-Mexico remittance corridor (the world's largest) and leads Latin American exchanges in trading volume: processing nearly $850 million in July 2024, 6.5 times the volume of the next largest exchange. In Latin America, stablecoins accounted for approximately 39% of crypto purchases in 2024, proving Bitso's early bet is paying off.

As the payment landscape evolves, centralized exchanges and crypto-native remittance service providers are accelerating their expansion into the payment field: they have successively launched their own payment applications (such as Kraken's Krak) and issued exclusive stablecoins anchored to local currencies (such as Bitso's MXNB and BRL1).

In the "stablecoin sandwich" model, these local stablecoins serve not only as a medium for cross-currency transfers but also as the final settlement destination, allowing users to remain on-chain throughout the entire process without withdrawing funds to a bank account. Looking ahead, we expect more exchanges and remittance platforms to launch regional stablecoins and leverage their own liquidity pools for fast redemption.

Overall, the focus of these players is shifting from transactions to optimizing the payment experience: by providing returns on account balances and extending to peripheral services such as credit/debit cards (such as the Coinbase One card), they are improving payment efficiency while keeping users in the on-chain ecosystem for a long time.

Today, the stablecoin market is almost entirely denominated in US dollars, but this won't remain the case forever. As tokenized payment applications expand, demand for local currency stablecoins will surge. The future of tokenization is multipolar.

— Harvey Li, founder of Tokenization Insight

6.3 Stablecoin-related card business

Stablecoin credit and debit cards are one of the most compelling use cases to date. By combining the global acceptance networks of Visa and Mastercard with the programmability and transparency of blockchain, fintech companies are enabling consumers around the world to pay directly with their crypto or stablecoin balances at tens of millions of merchants.

Artemis data shows that tracked stablecoin card payment volume has grown from approximately $250 million per month in early 2023 to over $1 billion per month in early 2025.

Encryption can't be a compromise; it has to be better—more convenient, more flexible, and more powerful. We're closer to this goal than we were a year ago, but winning requires integrating direct debits, SEPA transfers, and even local Visa/Mastercard alternatives, blurring the lines so thin that users forget they exist.

— Stefan George, co-founder of Gnosis Pay

Two major innovations are driving this shift:

• Back-end: Stablecoins tokenize accounts receivable, accelerating card clearing and improving the capital efficiency of card issuers;
• Front-end: Users can hold stablecoins directly on the card rail, seamlessly gain access to US dollars, and spend them immediately even in markets where US dollars are in short supply.

6.3.1 Tokenized Accounts Receivable

In the traditional credit card process, the issuing bank (such as Chase and Capital One) first advances the payment to the merchant, forming accounts receivable on the balance sheet. After that, the issuing bank needs to sell the accounts receivable in batches to warehouse lenders to recover the funds. The entire process involves a lot of paper documents and coordination, usually resulting in a settlement delay of about two weeks, which brings significant operating costs.