Cross-border payment landscape of stablecoins: In-depth analysis for the year 2025's financial sector
In the rapidly evolving landscape of cross-border payments, stablecoins are making a significant impact, particularly in emerging markets and regions with high traditional remittance costs and currency volatility. The adoption of stablecoins is accelerating globally, with nearly half of financial institutions now using them for payments, prioritizing them for cross-border transactions.
The core advantage of stablecoins lies in the real-world improvements they offer compared to legacy systems. These improvements include faster settlement, lower fees, and enhanced security, which are particularly beneficial for businesses and consumers who have long suffered from inefficient payment rails.
Opportunities abound for stablecoins in cross-border payments. Cost reduction is a significant advantage, with stablecoin transactions costing as little as 0.1%, compared to 2–3% for traditional remittances. This cost reduction unlocks substantial savings for individuals and businesses in emerging markets. Furthermore, stablecoins offer near-instantaneous settlement, avoiding the multi-day delays of correspondent banking.
Global access is another advantage, as businesses in developing economies can use dollar-backed stablecoins to pay international suppliers, improving supply chain efficiency and access to global commerce. Compliance and transparency are also key benefits, with new regulatory frameworks embedding strong AML/CFT, KYC, and reserve disclosure requirements. These measures could build trust and interoperability across jurisdictions.
However, stablecoins face several challenges. Regulatory fragmentation remains a significant issue, with global regulation being patchy, creating compliance complexity and legal uncertainty for issuers and users. Delays in regulatory harmonization and certification of "comparable" foreign regimes can slow cross-border adoption.
Dollar dominance is another challenge, as heavy reliance on USD-backed stablecoins may provoke pushback from countries seeking to reduce dollar influence, potentially fragmenting the market with competing stablecoin ecosystems. Liquidity and infrastructure issues, as well as privacy versus compliance concerns, also pose challenges.
To address these challenges, stablecoin providers must ensure seamless, invisible integration that delivers tangible benefits without requiring technical understanding from the user. Stablecoins are paving the way for programmable money and tokenized assets, with potential to integrate with broader digital finance ecosystems.
A comprehensive report, available as a PDF and in digital form, provides a detailed primer on the state of the stablecoin cross-border payments industry, including the current total addressable market. The report is based on cross-border payments data, expertise, and insights from 14 leaders from key companies across the industry. It includes a stablecoins 101 glossary of terms for easier understanding and can be navigated by sections, with more information about the platform's stablecoin data product found on their dedicated page. The report is part of a wider range of research and analysis on cross-border payments globally and is accompanied by an industry-leading newsletter.
In conclusion, stablecoins are rapidly moving from experimental to essential infrastructure in cross-border payments. Their full potential will only be realized as the challenges of regulatory fragmentation, ensuring robust liquidity and infrastructure, and delivering seamless user experiences are addressed. The technology is here to stay, and its impact on the cross-border payments industry is set to grow significantly in the coming years.
- Involved in the digital finance ecosystem, stablecoins are poised to benefit both businesses and consumers in emerging markets, offering advantages such as faster settlement, lower fees, and enhanced security.
- As the adoption of stablecoins increases for cross-border transactions, particularly in regions with high traditional remittance costs and currency volatility, the technology industry plays a crucial role in developing seamless integration for users, further expanding the reach of the finance industry.
