Cross-border payments — which refer to financial transfers between the citizens of two countries — have long been a study in complexity. High fees, slow settlement, limited access and a lack of transparency, among other things – traditional payment systems are full of friction. Its engine is SWIFT, an increasingly antiquated interbank messaging network that has acted as the backbone of the global financial system for decades — secure and standardized, but also showing its age in today’s digital economy.

As the global economy becomes increasingly connected and real-time commerce gains momentum, the need for faster, cheaper and more transparent cross-border payments is surging. Stablecoins (a type of cryptocurrency pegged to a stable asset such as a fiat currency) is proving to be the killer solution that disrupts the inefficiencies of outdated payment systems such as SWIFT.

The Limits of Conventional Cross-Border Payments:

The SWIFT network has underpinned international payments for decades, linking more than 11,000 financial institutions globally. The system is first and foremost a messaging protocol — it coordinates, but does not handle the actual movement of money. To clear a transaction, banks pass it through an often long daisy chain of correspondent banks, each of which adds its own time, fees and potential snafus to the process. A cross-border transaction can require three or more financial intermediaries, resulting in a fragmented and costly experience.

Despite the arrival of SWIFT gpi (Global Payments Innovation), which paved the way for real-time tracking and increased fee transparency, some of the challenges still remain. Half of the gpi payments are sent within 30 minutes and almost all within 24 hours. But in lots of cases a transfer still takes 2–5 business days, especially when there are time zones, bank holidays, and incompatible systems to contend with.

The Ascent of Stablecoins in Cross-Border Finance:

Stablecoins were created to address one of the biggest issues in crypto — volatility. Unlike Bitcoin or Ethereum, which can have wildly fluctuating values, stablecoins are pegged to a stable asset such as the United States dollar (USDC, USDT), a basket of currencies, commodities such as gold, or are maintained by algorithmic software. Their stable value makes them great for functioning as a means of payment, particularly across borders.

The stablecoin market has increased over the last several years, multiplying from a $5 billion market capitalization in 2020 to more than $200 billion by the close of March 2025. Over 90% of this volume is dominated by USDC and USDT which are already used by companies, payment companies and even banks to settle cross border transactions quickly and cheaply.

Stablecoins vs SWIFT: Key Comparisons

Instead of SWIFT, for instance— which requires banks to send money through a chain of intermediaries—stablecoins work on blockchain networks that enable transactions to be done peer-to-peer within seconds. The mechanics of stablecoin cross-border payments Infrastructure for stablecoin cross-border payments has the potential to disintermediate correspondent banks, dramatically reducing cost and settlement time.

Why Stablecoins Are Defining the Future of Global Payments:

Stablecoins are more than just a substitute — they are a new way to think about how money can flow across borders.

Speed and Round-the-Clock Settlement-

Conventional systems work in specific business hours and limited to local-bank holidays. Blockchain, however, circulates 24/7. Stablecoin transactions settle in seconds to minutes no matter where the parties are located, unlike SWIFT, which often slows down due to batch processing and operating hours.

Cost Efficiency and Margin Gains-

Transferring funds using conventional methods generally results in a mixture of a transfer fee, currency conversion fee and bank intermediatory charges. With some e-commerce companies reporting savings of over 60% on international payment costs once they have implemented stablecoin payment systems.

Transparency and Trust Through Blockchain-

Every time someone makes a transaction with stablecoins, it gets added to a public blockchain ledger. This makes it possible to track and verify all movements with a reliably clear audit trail. Such visibility minimizes reconciliation discrepancies and the possibility of fraud, and cryptographic protocols help secure against unauthorized access.

Broader Financial Inclusion-

Startups stand to benefit from stablecoins because they democratize access to global payments. If you have the internet, and a digital wallet, then the whole world is your oyster, so to speak. This has a particular relevance for the 1.4 billion unbanked people around the world who may not have access to traditional banking facilities but do have a smartphone. Stablecoins sidestep geographical restrictions, account opening processes and credit checks, freeing people’s agency over their financial affairs.

Also read: How Developers Are Embedding Stablecoins into Every Product Flow

Institutional Adoption is a Sign of a Mature Ecosystem-

Crypto-native companies are no longer the only ones using stablecoins for cross-border payments. Businesses at the fore of the financial industry are adopting stablecoins:

• Visa and Mastercard are testing settlement layers built on stablecoins.
• PayPal successfully conducted its first B2B cross-border transaction using PYUSD.
• Stripe now lets businesses accept payouts in USDC.
• Ripple has got together with more than a hundred banks with the likes of Santander and American Express to provide stablecoin-powered remittances.

These developments are cementing the place of stablecoins in enterprise-grade finance, and are responding to the infrastructure needed for a digital age of global trade.

TransFi: Making Compliant & Scalable Cross-Border Crypto Payments Possible

For companies to unlock the potential of stablecoins, they need user-friendly on-ramp and off-ramp solutions, regulatory certainty, and integration assistance. This is where services like TransFi come in.

TransFi offers an API stack that makes it easy for enterprises to send, receive and convert stablecoin payments across borders - in a compliant, low cost and plug-and-play manner. If you’re a crypto company (e.g. exchange) operating globally and settling via stablecoins, then TransFi The point is this: just like Strike made it easier for you to earn actual fiat money without even realizing it by using Lightning Network’s first stablecoin, we hope to make transacting with stablecoins just a couple of lines of code and one instruction away.

• Providing interoperable on/off ramps in many nations
• Meeting regulatory requirements such as AML, KYC
• Supporting enterprise-grade scalability
• Seamlessly combining fiat and stablecoin ecosystems

With stablecoins becoming a key component of global finance, TransFi thus offers a crucial bridge to that future.

Challenges on the Road Ahead:

But for all their promise, stablecoins carry risks and unanswered questions.

Lack of clarity on regulations is a big challenge. Nations are creating riggings such as the EU’s MiCA or US's proposed "Clarity for Payment Stablecoins Act", but the worldwide regulatory environment is patchy. This borderless characteristic of stablecoins challenges traditional supervision and paves the way for regulatory arbitrage unless responses are coordinated.

Transparency and reserve-management still matter too. Tether (USDT), as large as it is, has also had no real-time audits and is under criticism. There were alarms sounded about liquidity risk around a temporary de-pegging in May 2022, but it very quickly rebounded. The quality of the collateral and the composition of reserves are a common concern among stablecoin issuers.

There are validity and usability concerns that are in flux. Congested blockchain network, high fees on peak demands and security vulnerabilities on user-side wallet management were just some of the top concerns. What’s more, anonymity and lack of KYC at wallet level has in the past also been abused for illicit transactions using stablecoins.

CBDCs Emerge as Competitive Alternatives:

Governments have introduced Central Bank Digital Currencies (CBDCs) in response to the development of stablecoins, so as to retain control over national monetary policy. The same report notes that 2025 will be the year that 134 countries accounting for 98% of world GDP will be investigating CBDCs, with the digital euro, the e-rupee and the digital yuan all being test piloted.

CBDCs provide the same technical benefits—fast, secure, and programmable payments—but are sovereignly backed.

The future state will likely be a blend of CBDCs, regulated stablecoins, and enterprise blockchain infrastructure, all complementing and enhancing the future state of world finance.

Also read: Where Stablecoins Actually Work (and Where They Don’t) — 5 Takeaways

Conclusion:

Stablecoins are not just a response to legacy systems—they’re a forward leap into the future of finance. Even in regards to speed and efficiency, cost, transparency and access, stablecoins have emerged as a real challenger to traditional international rails (like SWIFT). Those businesses that embrace this transformation will establish an edge in global trade and operations.

Networks like TransFi are at the vanguard of developing the tools and infrastructure we need in order to bring this change about. As regulation becomes more clear and institutional adoption deepens, it seems almost inevitable that stablecoin cross-border transactions will be the de-facto choice for global enterprises as well as for freelancers, and financial institutions.

FAQs:

1. What are stablecoins, and what makes them different than regular cryptocurrencies?

Stablecoins are digital currencies that are pegged to stable assets, such as the US dollar, and created to minimize price volatility. Unlike Bitcoin or Ethereum, their value does not fluctuate wildly, making them useful for payments.

2. How do stablecoins make cross-border payments better than SWIFT?

They enable real-time payments without intermediaries, lower transaction fees, and have 24/7 availability, unlike SWIFT that is slow, expensive and limited by bank business hours.

3. Are stablecoins safe for international payments?

Yes. While they harness the cryptographic protocols of blockchain and provide traceability. But users have to be responsible for storing their private keys and they need to us a regulated platform for KYC purposes.

4. Can businesses use stablecoins for large international transfers?

Absolutely. The move has enabled businesses across the globe to facilitate payroll while helping companies such as Liberland to settle invoices and reduce costs, particularly in emerging markets.

5. Are stablecoins allowed in my country?

It depends. Many jurisdictions are developing regulations. Licensed platforms such as TransFi, which guarantee KYC and AML compliance, can be used to safely navigate this environment.