Transfer Money Quickly: The Impact of Stablecoins on Cross-Border Transactions

      Stablecoins are transforming cross-border payments by increasing speed, reducing costs, and enhancing transparency. These digital currencies are tied to stable assets, such as the U.S. dollar, which helps maintain their value and prevents significant fluctuations. Major companies like Visa, Circle, and PayPal are investigating stablecoin options to disrupt traditional remittance systems.

      What are the main issues with conventional systems? Senders often encounter delays of several days and incur fees of around 6–7% per transaction. In contrast, stablecoin transactions can complete in seconds and may involve costs ranging from 0.5% to 3%, with some transactions costing merely a penny.

      This isn’t merely theoretical. Innovative platforms like Stellar, Ripple, and Tron are already utilizing stablecoins to simplify payments, challenge correspondent banking, and serve underserved populations.

      What Are Stablecoins and Why Are They Important?

      Stablecoins are digital currencies that are linked to stable assets, typically fiat currencies such as the U.S. dollar. Their value remains stable (1 USDC = 1 USD), distinguishing them from more volatile cryptocurrencies like Bitcoin.

      They are significant because they merge the quickness and transparency of blockchain technology with the dependability of traditional currency. They allow for instant value transfers globally without the risk of significant price fluctuations, making them suitable for everyday transactions.

      Stablecoins generally fall into four categories:

      1. Fiat‑backed: These are backed 1:1 by currencies like dollars or euros (e.g., USDT, which you can acquire online through numerous trusted platforms).

      2. Crypto‑collateralized: These are backed by other cryptocurrencies (e.g., DAI).

      3. Commodity‑backed: These are supported by physical assets like gold (e.g., PAXG).

      4. Algorithmic: These use algorithms to maintain their peg without backing assets (e.g., Terra-style).

      People choose to use stablecoins for several reasons:

      - Rapid, always-available payments.

      - Low fees with no banks or intermediaries involved.

      - A consistent way to store and transfer value without volatility.

      They are not solely for cryptocurrency enthusiasts. Large corporations like Vale, Stripe, and PayPal are implementing stablecoins in their payment systems. Regulators are also paying attention and are drafting regulations for issuers and reserves.

      In summary, stablecoins merge the benefits of blockchain technology with the reliability of fiat currencies, which is why they are becoming essential for international money transfers.

      Core Benefits of Using Stablecoins for Cross‑Border Transactions

      Stablecoins enhance global money transfers, making them quicker, cheaper, more transparent, and more inclusive.

      1. Instant, 24/7 transactions: Stablecoin transactions settle within seconds on blockchain networks, unlike days with banks. They operate continuously, unlike traditional systems that are unavailable on weekends or holidays.

      

      2. Significantly lower fees: Typical remittance costs are around 6% globally, but stablecoins can reduce this to 0.5–3%, depending on the currency and transfer route. Some transfers may only cost a few cents, especially for smaller amounts.

      3. Enhanced transparency and traceability: Every transaction is logged on a public ledger, allowing real-time tracking of funds and minimizing errors and fraud risks.

      4. Promoting financial inclusion: Stablecoins do not require bank accounts; users only need internet connectivity and a digital wallet, enabling cross-border payments for millions in emerging markets.

      5. Programmable and smart features: Smart contracts can automate payments—such as releasing funds once specific criteria are met—saving time and reducing errors.

      6. Proven scalability in real-world application: In 2023, stablecoins facilitated over $10 trillion in transactions, with $2.3 trillion linked to actual remittance and payment flows. Demand continues to grow at a rate of 17% annually.

      Regulatory and Compliance Perspectives

      Stablecoins require clear regulations. The U.S. enacted the GENIUS Act in June 2025, which mandates full 1:1 backing with liquid assets, monthly reserves reporting, and adherence to AML/KYC standards. This legislation clarifies compliance for companies like Circle and Ripple, stimulating a surge in legally compliant stablecoins.

      However, there are potential drawbacks. Stablecoins could undermine monetary control in smaller nations or lead to dollarization. European asset manager Amundi cautioned that U.S.-centralized regulations might disrupt global systems.

      Europe's MiCA provides robust guidelines. Since December 2024, issuers are required to maintain high-quality reserves (30% cash and the rest in sovereign bonds). They must gain authorization and ensure transparency through monthly audits, stress tests, and issuance limits prior to full supervision. These regulations led to a 200% increase in EUR-pegged stablecoin transactions in early 2025.

      Additionally, new EU guidance may soon permit non-EU stablecoins like USDC to operate locally under MiCA equivalence, enhancing interoperability and liquidity.

      Ripple is setting high standards. Its RLUSD stablecoin received approval from NY