Cross-border Payments and Stablecoins: A Comprehensive 2025 Guide for the Financial Industry
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In the dynamic world of finance, stablecoins are making a significant impact, particularly in cross-border payments. A comprehensive report, available for banks with relevant internal policies, offers a detailed primer on this subject.
According to Chris Harmse, Co-Founder and Chief Business Officer of BVNK, stablecoins are not just a buzzword but a new and upgraded payments technology. The report, which can be requested via email, delves into the state of the stablecoin cross-border payments industry.
Real-world Use Cases and Impact
From business-to-business (B2B) transfers to remittances, stablecoins are revolutionising cross-border payments. For instance, a Canadian lumber producer paying a U.S. buyer can use stablecoins to settle the payment near-instantaneously, bypassing traditional intermediaries and reducing foreign exchange fees.
In major remittance corridors like the U.S.-Mexico, stablecoins already handle about 5-10% of remittance flows, with projections of increasing to 30% within 3-5 years. In countries with high inflation and currency instability, dollar-backed stablecoins serve as a digital safe haven for preserving purchasing power.
Institutional Adoption
The report reveals that over 90% of financial institutions integrate stablecoins, with 49% already using them for payments and 58% specifically for cross-border transfers. Latin America leads usage at 71% due to high traditional costs and currency volatility.
Benefits and Challenges
Benefits of stablecoins include real-time settlement, enhanced payment transparency, cost savings, increased financial inclusion, and potential to reshape traditional financial models. However, challenges such as regulatory fragmentation, infrastructure integration, liquidity and off-ramping, risk management, and consumer adoption limits hinder widespread adoption.
As we move towards 2025, stablecoins are being brought deeper into the traditional ends of the market by landmark regulation, making this year significant for their growth in the cross-border payments industry.
The report, free to access with a created free account, provides insights from 14 industry leaders from key companies, a stablecoins 101 glossary of terms, and information on how the platform supports companies entering or working in the stablecoin cross-border payments space. The glossary can be accessed by scrolling to the end of the report or via a clickable section panel.
While the benefits of stablecoins are undeniable, understanding their technical complexities can be challenging. Eric Barbier, CEO and Founder of Triple-A, compares the hype around stablecoins to them being hyped as the solution to everything, like they're about to solve world hunger or cure cancer. Chris Harmse, on the other hand, believes that stablecoins have real businesses and use cases, and their adoption is real.
The report, available in both PDF and digital form, can be found on a specific stablecoin data product page. As the market for stablecoins is fast-moving and experiencing rapid development among various players, this report serves as a valuable resource for anyone interested in understanding the current state and future potential of stablecoins in the cross-border payments industry.
Stablecoins are increasingly being adopted by financial institutions, with 49% already using them for payments and 58% specifically for cross-border transfers (Impact). In the upcoming years, stablecoins' market penetration is projected to increase significantly, potentially reaching up to 30% in major remittance corridors (Future Projections).
