Stablecoins Reshape X-Border Payments; Banks, Networks Step In

At times, they behaved more like speculative assets than steady payment mechanisms.

However, established banks and global payment networks are increasingly embedding stablecoins into settlement rails that corporates and treasurers may trust.

Why Stablecoins Fit Cross-Border Use

Traditional cross-border payments are cumbersome. A payment may travel through multiple correspondent banks, each charging fees, performing compliance holds and holding prefunded balances in various jurisdictions. This leads to multiday settlement, foreign exchange slippage, float costs, limited transparency and reconciliation burden.

Stablecoins on blockchain rails seek to address these frictions directly. Because stablecoins are typically pegged to fiat currencies like the U.S. dollar, volatility is minimized. Settlement can become atomic and near instant. Token transfer and transaction metadata move together. Liquidity can be supplied just in time, so capital isn’t locked across multiple nostro accounts. Programmable rules can embed reconciliation, enforce compliance or trigger conditional transfers.

Stablecoins are emerging as connective settlement layers in B2B cross-border flows, helping chief financial officers manage liquidity more efficiently. When Coinbase reported second-quarter earnings results in July, CEO and co-founder Brian Armstrong said cross-border stablecoin payments are likely a $40 trillion opportunity, and the B2B market is 75% of that.

Payment Networks’ Stablecoin Push

Payment networks are among the first incumbents to fold stablecoin rails into their strategies. Visa announced Tuesday (Sept. 30) a pilot to enable institutions to prefund stablecoin balances into Visa Direct for global disbursements, while recipients still receive fiat. This cuts prefunding friction and turns what were days of float into minutes.

Visa framed stablecoin prefunding not as a cryptocurrency experiment, but as a treasury liquidity tool, treating tokenized balances as “money in the bank” for outgoing payouts.

Mastercard has also launched initiatives to settle cross-border card flows using tokenized settlement, emphasizing integration into existing payment infrastructure, interoperability across rails and regulatory compliance.

These network-led pilots signal that stablecoins are being embedded as extensions of, not replacements for, established processing rails.

Banks Build Issuance and Settlement Capacity

Banks are not idle. Many of the world’s largest institutions are exploring issuance and settlement capabilities. Those banks see stablecoins as a mechanism to streamline cross-border flows.

In Europe, a consortium of nine banks announced Sept. 25 that they launched a project to issue a euro-denominated stablecoin under the European Union’s Markets in Crypto-Assets regulation (MiCA) supervision, aiming for it to become “a trusted European payment standard” with near-instant, low-cost, cross-border settlement.

At the same time, banks are embedding existing stablecoins rather than reinventing everything. An August collaboration between Circle and Finastra connects bank payment hubs to Circle’s USDC settlement infrastructure, enabling fiat-originated payments to settle in USDC behind the scenes. This hybrid approach reduces friction for banks wanting stablecoin efficiency without rebuilding front-end systems.

The Interoperability and Bridging Challenge

Stablecoin rails are not uniformly cohesive. Many stablecoins exist across multiple blockchains (Ethereum, Solana, Avalanche, etc.). To move value across chains, institutions must use bridges, which lock tokens on one chain and issue equivalents on another. But bridging carries liquidity fragmentation, hidden spreads and security vulnerabilities.

Bridging may soon be central to liquidity management, cross-border settlements and risk exposure, and CFOs must manage predictability, liquidity and risk across multiple chains. Further, stablecoin bridging and token swaps introduce operational risk. Bridge hacks historically have accounted for roughly 40% of crypto value lost across the sector.

Networks and banks have an opportunity to reduce these risks by offering standardized cross-chain settlement services, curated liquidity pools and governance to rationalize fragmentation.