Stablecoins are emerging as one of the clearest near-term use cases for transforming cross-border payments, according to a report last month from accounting firm KPMG.
Banks currently rely on a correspondent banking network that moves about $150 trillion annually, the report noted, a system that typically takes between two and five days to settle, involves multiple intermediaries and has an average cost of $25 to $35 per transaction. transaction.
This infrastructure forces institutions to lock up large sums in nostro and vostro accounts around the world to ensure liquidity, KPMG said, creating inefficiencies that stablecoin technology is increasingly well positioned to address.
Stablecoins are cryptocurrencies whose value is tied to another asset, such as the US dollar or gold. They play a major role in the cryptocurrency markets and they provide a payment infrastructure and are also used to transfer money internationally. Tethers USDT is the largest stablecoin followed by Circles USDC.
From days to seconds
The audit firm noted that blockchain-based stablecoin solutions can reduce settlement times from days to minutes or even seconds, depending on the network used. Transaction costs can also drop dramatically, in some cases by more than 99% compared to traditional payment rails.
Lower prepayment requirements ease pressure on capital, improve overall liquidity and free up resources that would otherwise be trapped in dormant accounts, the report said.
Equally important, these networks offer real-time tracking and auditing, replacing the opacity of the current system with a level of transparency consistent with regulatory expectations.
KPMG noted that some major financial institutions have already begun moving real value across blockchain rails, demonstrating early adoption of this model. JPMorgan (JPM), for example, processes about $2 billion in daily transactions on its blockchain platform.
Meanwhile, PayPal (PYPL) launched its own stablecoin in 2023, which has since grown to a market cap of $1.17 billion.
These developments, according to KPMG, signal a clear market appetite for further expansion into stablecoin-powered cross-border payments and underscore how digital assets are reshaping global financial infrastructure in practical, revenue-generating ways.
Read more: Stablecoins will disrupt cross-border payments, says investment bank William Blair
