Stablecoins: the solution for cross-border remittances?

Stablecoins promise faster, cheaper remittances but can they really solve the cross-border remittance problem?

From instant cross-border payments to real-time interbank settlement and cheaper remittances, stablecoins could transform how digital value moves. Yet as adoption grows, so do questions around regulation, trust and the practicalities of moving value outside traditional banking rails.

What are stablecoins?

Stablecoins have emerged as one of the most promising – and misunderstood – crypto innovations. Designed to combine the speed and transparency of crypto with the reliability and familiarity of fiat money, stablecoins aim to make digital payments as stable as cash.

They’re a class of digital currencies designed to maintain a stable value by pegging their price to a reserve asset. In this way, stablecoins act as a type of bridge between the traditional finance and cryptocurrency worlds. They offer the benefits of blockchain-based transactions, such as speed, transparency and low fees, without the volatility of crypto assets such as Bitcoin or Ethereum.

What is the remittance problem?

Remittances tend to be personal cross-border transfers, often when relatives working abroad send money home to family. These funds are generally used for everything from daily expenses and healthcare costs to school fees and mortgages.

Behind the scenes, even remittances that don’t involve a bank account at the sender or recipient level may rely on banks for the actual transfer of funds. And that’s the problem: international bank payments are often time-consuming, expensive, complex and manual, due to the correspondent banking infrastructure that enables them.

What is the correspondent banking infrastructure problem?

Moving money internationally often takes too long and costs too much. There’s also uncertainty as to where the funds are and when they’ll arrive. This is because of how the correspondent banking system is built and operates.

If the sender and recipient are in different countries and bank locally, their respective banks won’t necessarily use the same domestic payment system. Rather, they rely on a network of international correspondent banks to offer their customers services internationally, without having local branches. Account-to-account cross-border payments are often processed by SWIFT. They may pass through numerous banks (or ‘hops’), sometimes in long chains, before reaching the recipient.

This is why remittances take anything from a few minutes to days to arrive. And why costs range from a few dollars to a percentage of the transfer amount. It depends on various factors: the sender and recipient countries, the payment methods used as well as the service provider or network.

What are the consequences of the correspondent banking infrastructure problem?

International remittances total hundreds of billions of dollars annually. They’re a lifeline for hundreds of millions of families. And dwarf foreign aid to some low- and middle-income countries.

Clearly, long execution times, high costs and bank de-risking are problems. They may push individuals to organizations without adequate anti-financial crime controls. Or even out of the formal, regulated financial sector altogether towards unlicensed money transmitters, cash couriers or hawala, which are higher risk than formal banking channels.

The UN, World Bank and civil society organizations are concerned. So much so, the UN has a Sustainable Development Goal to reduce the cost of migrant remittances to 3% or less by 2030 and eliminate transfer corridors where the cost is 5% or higher. Currently, the average cost to send a remittance is more than double the SDG target, namely 6.49%, according to World Bank figures for Q1 2025.

What’s worse is that this global average hides significant variation. Banks continue to be the costliest channel for sending remittances (with an average cost of 14.5%), followed by post offices (7.7%), money transfer operators (5.0%), and mobile operators (4.9%).

To what extent do stablecoins solve the remittance problem?

Stablecoins side-step many of the problems of traditional bank-based cross-border payments, specifically around execution time, cost, complexity, coverage and more.

• Faster settlement – with near-instant settlement, funds are on account in real time, irrespective of customer location.
• Lower transaction costs – stripping out intermediaries strips out cost and duplication, which makes processing cheaper than traditional bank transfers.
• Global by default – it’s a global rail that transcends national borders.
• 24/7 availability – available everywhere with an internet connection, 24/7.
• Transparency – transactions are recorded on a blockchain for full traceability.
• Inclusivity – no bank or card account is required to send or receive payment, boosting financial inclusion among the un- or under-banked.

However, stablecoins may not be the complete solution to the cross-border remittance problem. There are currently drawbacks, specifically a lack of clarity around reserves and regulation, plus adoption and accessibility concerns.

Some stablecoins are backed 1:1 by fiat currency, others by cryptocurrencies or a basket of cryptocurrencies, and others collateralized by a mix of real-world assets and algorithms. The risk depends on a stablecoin’s characteristics, how reserves are audited and who models and tests systemic risks. Naturally, this has implications for volatility and trust.

Regulation can go some way to building trust in stablecoins. The challenge is that while crypto is global and cross-border by default, regulation tends to be national in scope. Differing start points, gaps and enforcement may also create regulatory arbitrage and uncertainty.

There are also the practical and logistical aspects of using stablecoins. Senders and recipients may have to use crypto wallets to transact in stablecoins. Plus, convert stablecoins into and out of local currency, which could introduce fees, delays and regulatory checks.

In short, stablecoins go some way to solving parts of the remittance problem. But for the short- to medium-term, they’re likely to be complementary to rather than replacing other tools and payment rails for cross-border money movement.

What is happening in practical terms around stablecoins for cross-border payments?

The projections for stablecoin growth are bullish. At the current rate of growth, daily transaction volumes using stablecoins could reach at least $250 billion in the next three years. That’s greater than the current volume of payments processed by major card networks, writes McKinsey in a 2025 briefing paper.

Various banks and financial companies are looking to issue stablecoins. This includes a group of nine European banks that have announced their intention to launch a euro-backed stablecoin, and ten major international banks that are exploring the issuance of stablecoins pegged to G7 currencies.

Meanwhile, Swift and a group of more than 30 financial institutions globally plan to introduce a Blockchain-based ledger to enable 24/7, real-time cross-border value exchange, as announced at the annual Sibos conference in 2025.

What does the future hold for stablecoin remittances?

Stablecoins allow people and businesses to convert fiat money into cryptocurrency more easily for faster, cheaper, more programmable payments, which includes remittances.

As infrastructure improves and regulation catches up, stablecoins could become a standard payment rail alongside traditional systems. Inpay is busy fast-tracking the shift to a hyper financial system. We’re looking beyond the status quo of traditional banks and banking to what comes after.

Inpay is building a seamless platform where fiat and digital finance move as one. The promise we make to our customers is to move any currency across borders and systems, without sacrificing trust or compliance. No more detours. No more waiting. Just money that finally move the way people expect it to – payments for a world that can’t wait.