Why Stablecoins Can Disrupt Cross-Border Payments?
The internet has made information free and global. So why is transferring funds still so difficult and costly?
The early internet promised a future where anyone could publish, build, or transact without permission. Protocols like email and the World Wide Web were open and neutral, sparking creativity, innovation, and entrepreneurship. However, the development veered off course.
Today, the global financial system resembles a patchwork quilt of corporate networks: centralized, closed, and predatory. Behind every transaction lies a Rube Goldberg machine of intermediaries, such as point-of-sale systems, payment processors, acquiring banks, issuing banks, local banks, agent banks, foreign exchange exchanges, credit card networks, and more. Each entity takes a cut, adding delays and imposing rules. These networks impose unnecessary taxes on commercial activity and stifle innovation, turning what should be neutral channels into high-friction bottlenecks.
Stablecoins, cryptocurrencies pegged to stable assets like the US dollar, offer a way out—a reset that brings the internet’s original vision into currency.
Disruptive Opportunities of Stablecoins
The current payment systems were not built for the internet—they were built for a world filled with fee-collecting intermediaries (who once played roles in managing local cooperation, fraud prevention, and operations). Even today, international remittance fees can reach as high as 10% (in September 2024, the average fee for a $200 remittance was 6.62%).
These are not just frictions—they are effectively a regressive tax levied on some of the poorest workers in the world. The inherited system is slow, opaque, and exclusionary, leaving billions underserved or entirely cut off from the global financial system.
For many businesses, traditional payment methods are extremely inefficient. Stablecoins can significantly improve this situation. B2B payments from Mexico to Vietnam typically require 3 to 7 days for settlement, with costs ranging from $14 to $150 per $1,000 transaction, passing through as many as five intermediaries, each taking a percentage. Stablecoins can bypass traditional systems like the international SWIFT network and associated clearing and settlement processes, making such transactions nearly free and instant.
This is not just theoretical—it is already happening. Companies like SpaceX are using stablecoins to manage their corporate funds (including repatriating funds from countries with volatile local currencies like Argentina and Nigeria). Companies like ScaleAI are using stablecoins to pay their global employees faster and cheaper.
Meanwhile, in the B2C (business-to-consumer) space, Stripe is the first service provider to widely offer cryptocurrency payments, charging a 1.5% fee, only half that of traditional payment methods. This could significantly increase the profit margins for certain businesses: as a16z partner Sam Broner pointed out, for low-margin businesses like grocery stores, a 1.5% increase in profit margin could potentially double net income. (Moreover, in a competitive, blockchain-based market, transaction costs are expected to drop even further.)
Unlike the old financial system that developed in “silos,” stablecoins inherently possess global characteristics. They operate on blockchains: anyone can build open, programmable networks. There is no need to negotiate with dozens of cross-border banks; simply connect to the network. These advantages are already being recognized.
In 2024, stablecoin transaction volumes reached $15.6 trillion, comparable to Visa’s transaction volume. Although this figure primarily represents capital flow (rather than retail payments), its scale indicates that we are on the verge of a transformative shift in financial infrastructure that does not rely on the patchwork of 20th-century systems.
Instead, entirely new, truly internet-native things can be built—what Stripe refers to as the “room-temperature superconductor of financial services,” where the goal is not lossless energy transfer, but lossless value transfer.
The “WhatsApp” Moment in Currency
Stablecoins give us the first real opportunity to make currency open, instant, and borderless, just as email transformed communication.
Recall the evolution of text messaging. Before applications like WhatsApp, sending a text message across borders meant paying 30 cents for each message. And if a message actually arrived, that was considered lucky. Then, internet-native messaging applications emerged: instant, global, and free.
Today’s payment systems are akin to messaging in 2008: divided by borders, burdened by intermediaries, and controlled by gatekeepers.
Stablecoins offer a brand new alternative. They do not patch together clunky, expensive, and outdated systems; they flow seamlessly across a global blockchain.
These systems are programmable, composable, and designed for cross-border scaling. Stablecoins have dramatically reduced remittance costs: sending $200 from the US to Colombia via traditional methods costs $12.13; using stablecoins, the fee is only $0.01. (The fee for stablecoin conversion to local currency ranges from 0-5%, and prices continue to decrease due to increased competition.)
Just as WhatsApp disrupted expensive international calls, blockchain payments and stablecoins are changing global remittances.
Regulation: From Bottleneck to Breakthrough
It is easy to view regulation as a barrier, but wise legislation is the key to solving the problem.
Establishing clear rules for stablecoins and the crypto market could ultimately help these technologies move out of the sandbox and toward broader adoption. For years, DeFi has been trapped in a closed, circular, “coin-to-coin” economy. Not because these tools are useless, but because regulators have made it difficult for them to enter the traditional financial system.
This situation is changing. Policymakers are actively crafting rules to recognize and regulate stablecoins to maintain US competitiveness, protect consumer rights, and foster innovation. Thoughtful regulation—such as a framework that distinguishes between network tokens and security tokens—can guard against bad actors while providing clear guidance for compliant actors. In fact, an upcoming bill clarifying these regulatory rules could pave the way for broader adoption and integration into the global financial system.
Building Public Goods That Benefit Everyone
Traditional finance is built on private, closed networks. But the internet showcases the power of open protocols (like TCP/IP and email) that drive global collaboration and innovation.
Blockchains serve as the native financial layer of the internet. They combine the composability of public protocols with the economic strength of private enterprises. They possess trusted neutrality, auditability, and programmability. Adding stablecoins on top will yield something we have never truly had: an open monetary infrastructure.
One can envision it as a public highway system. Private companies can still build vehicles, run businesses, and create roadside attractions. But the roads themselves are neutral and open to all.
The role of blockchain networks and stablecoins goes far beyond lowering costs. They are giving rise to new categories of software:
- Programmatic payments between machines: AI-driven markets automatically match transactions for computing resources and other services.
- Micropayments for media, music, and AI contributions: simple rules for budgeting allow “smart” wallets to make payments.
- Transparent payments with full audit trails: using these systems to track government spending.
- Global trade without cumbersome intermediaries: instant settlement of international transactions at extremely low costs—this is already happening.
The era of blockchain networks and stablecoins has arrived: technology, market demand, and political will are converging to make these applications a reality. A stablecoin bill may pass this year, and regulators are weighing frameworks that match risks with proper oversight.
Just as early internet startups flourished once it became clear they wouldn’t be shut down by telecom companies or copyright lawyers, cryptocurrencies are ready to bridge the gap from financial experiment to critical infrastructure, with stablecoins leading the way.
There is no need to patch the old systems; we can reconstruct better systems.
This article is collaboratively republished from: PANews