Stablecoins are emerging as one of the clearest near-term use cases for transforming cross-border payments, according to a report last month from accountancy firm KPMG.
Banks currently rely on a correspondent banking network that moves roughly $150 trillion annually, the report noted, a system that typically takes between two and five days for settlement, involves multiple intermediaries, and carries an average cost of $25 to $35 per transaction.
This infrastructure forces institutions to lock up large sums of money in nostro and vostro accounts around the world to ensure liquidity, KPMG said, creating inefficiencies that stablecoin technology is increasingly well-positioned to solve.
Stablecoins are cryptocurrencies whose value is tied to another asset, such as the U.S. dollar or gold. They play a major role in cryptocurrency markets, providing a payment infrastructure, and are also used to transfer money internationally. Tether’s USDT is the largest stablecoin, followed by Circle’s USDC.
From days to seconds
The accountancy firm noted that blockchain-based stablecoin solutions can reduce settlement times from days to minutes or even seconds, depending on the network being used. Transaction costs can also drop dramatically, in some cases by more than 99% compared with traditional payment rails.
Lower prefunding requirements ease the pressure on capital, improving overall liquidity and freeing up resources that would otherwise be trapped in dormant accounts, the report said.
Just as importantly, these networks offer real-time tracking and auditability, replacing the opacity of the current system with a level of transparency that aligns with evolving 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 around $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 capitalization 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, Investment Bank William Blair Says