Author: AI Soros Scott Source: X, @0xScottBTC

Why is cross-border payment sometimes fast and sometimes slow? Where is the innovation of stablecoins, and what challenges hinder their progress? This article will analyze the scenarios of cross-border payments and stablecoin payments, and based on this, estimate the penetration of stablecoin cross-border payments.

Introduction

In a coffee shop, scanning a QR code allows for instant payment; however, when a Shenzhen assembly factory wants to pay $50,000 to a Brazilian supplier, it is often informed by the bank: "Expected T+2 to T+3." This is not because the bank's computers can't keep up, but because three institutional chains—fragmented ledgers, liquidity inertia, and compliance reviews—turn technological potential into real-world obstacles. This article first clarifies how these chains slow down cross-border transactions, then examines how stablecoins can speed things up, in which scenarios they are truly implemented, and finally breaks down the high walls and potential market spaces they still need to overcome.

1. Traditional Cross-Border Payments: Three Institutional Chains

1.1 Ledger Fragment

Terminology Explanation | Correspondent Bank: When two banks do not have direct account relationships, a third-party bank acts as an intermediary for bookkeeping and settlement.

There is no "world central bank ledger" internationally. If Thailand's Kasikorn Bank wants to pay dollars to Brazil's Banco do Brasil, it must first transfer the money to an agent bank in New York or London, which then forwards it to the receiving bank. With each additional jump, there is one more message, one more reconciliation, and one more transfer fee.

A clear overview of the "ledger fragments"

• Multi-level proxy → Layered encryption and decryption of messages
• Different operating time zones → Approval nodes are difficult to synchronize
• Fees are charged progressively → Final costs increase

1.2 Liquidity Inertia

Glossary｜Nostro: A foreign currency account opened by me at your bank, used to deposit settlement funds.

Banks must pre-deposit US dollars with the correspondent bank to prevent "insufficient balance" from causing settlement failure - this portion of the money sits idle all day and cannot be invested.

• New York cut-off time at 15:00;
• Weekend and holiday gate closure for 48 hours;
• Instructions on Friday nights in Asia often "sleep" until the following Monday.

The two main side effects of liquidity inertia

1. Capital idle: A company clearly has money on its account, but is unable to circulate it due to "cross-border in transit."
2. Hidden costs: opportunity cost of pre-depositing idle funds + overnight interest rate differential.

1.3 Compliance Review

Definition of Terms | FATF 40 Recommendations: Global Standards on Anti-Money Laundering and Counter-Terrorist Financing.

Glossary | OFAC: Office of Foreign Assets Control of the U.S. Treasury Department (sanctions list).

In cross-border links, each hop must independently perform KYC, AML, and sanctions list screening.

• The risk control model triggers a manual review at the slightest doubt;
• Time zone + holiday misalignment, instructions are easily suspended;
• If any node slows down, the whole chain will follow.

The core pain points of compliance review

• "The Slowest Determines Law": Single point latency magnifies to link latency.
• Huge fines: Banks prefer to be slow than risk money laundering.

2. The "Three Strikes" Unchaining of Stablecoins

2.1 Shared Ledger —— Multi-hop compression into "one hop"

Definition｜Shared Ledger: A blockchain database that is jointly maintained by multiple parties and is immutable.

In the USDC network, the paying bank transfers 50,000 USDC to the receiving bank address, and the other party confirms on the chain a few seconds later. The intermediary bank, message, and reconciliation steps disappear simultaneously.

2.2 Programmable Liquidity - Turning Dead Money into Live Money

Terminology Explanation | Tri-party Repo: A repurchase agreement for U.S. Treasury bonds facilitated by a third-party custodian, allowing overnight liquidity lending. Terminology Explanation | Tokenized T-Bill: A token representing short-term U.S. Treasury bonds mapped on the blockchain, which can be invoked by smart contracts.

• J.P. Morgan Onyx: Putting Tri-party Repo on-chain, intra-group repurchase → instant liquidity.
• Franklin Templeton BENJI: Issues Tokenized T-Bill, which can be collateralized for USDC.
• 2025 "Payment Stablecoin Act": Passed by both houses, allows reserves to hold ≤ 90 days of government bonds with real-time disclosure, regulated by OCC.

Current situation: Dead money can now "pledge national bonds → borrow stablecoins instantly", but to become a global conventional tool, it still requires the expansion of custodians, clearinghouses, and regulatory sandboxes.

2.3 Payment is Asset Management —— 0 % → 4 %+

In Europe and America, as long as a 1:1 reserve is maintained, over 80% of the funds can be invested in government bonds with a maturity of ≤ 90 days, yielding an annualized rate of about 4%. The originally zero-interest customer balances immediately transform into a revenue engine.

3. Traditional vs. Stablecoins: Who is Faster, Who is Slower, and How to Compensate?

3.1 The traditional scene has quickly changed.

Glossary｜FedNow / SEPA Instant: Local instant payment systems in the US and Eurozone, achieving true second-level settlement.

• Same currency + Single clearing network → Smooth technology, low cost.
• The next scenario for stablecoins has limited acceleration on the front end, but changing the technical architecture allows for an increase in revenue through a 4% government bond interest spread in the backend.

3.2 Traditional "Conditional Fast" Scenarios

The London↔New York trading session only requires a jump of the agent bank, and the USD can land at T+0.5. However, it slows down during weekends or cut-off times, and stablecoins, with 24×7 on-chain settlement, become the "backstop solution."

3.3 Traditional Structural Slow Scenarios

• Long chain: Thailand ↔ Brazil, 2–3 tier agents + weak RTGS → T+2~3.
• Weak infrastructure: Remittance fees in Africa and Latin America are 7–10 %.
• Small fragments: Freelancers' $200 salary is diluted by a $20 fee.
• Accounting blind spot: USD flow suspension for 48 hours on weekends.

In the above scenario, the advantages of a stablecoin with a jump chain + Gas < 1% + 24×7 are immediate.

4. The Five Major Barriers Stablecoins Still Need to Overcome

1. Local currency landing — On-chain US dollars want to convert to fiat currency, still need legal FX license and quota.
2. Regulatory Fragmentation - The United States refers to it as "payment stablecoins", the European Union categorizes it as "electronic money", and Japan demands "bank-issued".
3. Reserve Transparency - USDC monthly audits, USDT only attested; discount rate and frequency lack uniformity.
4. On-chain Compliance - The Travel Rule requires real-name verification, GDPR restricts cross-border data, and businesses must "run both ends."
5. Macroeconomic Stability - If banks hoard the same stablecoin, a redemption crisis may impact the short-term treasury market.

5. Market Prospects: Median Estimation

• 2024 Status: Stablecoin market capitalization is about 150 billion USD; cross-border penetration < 2 %.
• Assumption: Weekend + Long-chain remittances account for 12% of the global total, stablecoin cross-border penetration CAGR 45% from 2025 to 2030.

Annual market value ( median ) cross-border penetration save agent fees* 2026 ≈ 500 billion ≈ 10% ≈ 1.5 billion USD 2030 1–1.5 trillion 25–30% 4–6 billion USD

*Estimated at an average fee rate of 50 bp based on traditional agency.

Conclusion

• Traditional Slowness: Ledger Fragmentation, Dormant Funds Interruption, Compliance Review;
• Speed of Stablecoins: Shared Ledger + Programmable Liquidity, turning zero-interest reserves into a 4%+ spread;
• Real high walls: Local currency landing, global regulatory consensus, and macro stability still to be resolved.

In summary, stablecoins upgrade cross-border payments from a "long journey relying on time to exchange space" to the "movement of a pointer on a globally shared ledger." The speed is astonishing, but what truly disrupts is the profit chain of multi-tiered correspondence. As long as regulations, liquidity, and governance eventually sync with the blockchain, cross-border payments will no longer be timed by business days, but by "block height."