Payments are broken, and stablecoins are rapidly fixing them | Opinion

Here is a statistic that should keep payments executives awake at night: stablecoins now process $27.6 trillion annually. That’s more than Visa and Mastercard combined — and the number is only growing. What we are witnessing is not a gradual evolution of payments, but a complete replacement of the plumbing that the global financial system runs on. And we’re only at the beginning. 

Global payments are broken 

Our current international financial system is horrendously inefficient. While the user experience has improved dramatically, we’re still using the same basic infrastructure from the 1970s. 

The reality is that ‘simple’ wire transfers require multiple complicated steps. Your bank sends money to its correspondent bank, which then goes to the SWIFT network, then the receiving correspondent bank, to the final bank, before making it to the recipients. Each stop takes a cut, causes a delay, and creates a point of failure. 

The results of this are profound. There is an average of 6% fees on remittances, $10 trillion is locked up in nostro/vostro accounts doing nothing, 38% of businesses report payments delays of five days or more, and $400 billion is expected to be lost to fraud over the next decade. 

And this is all while the payments industry generates $2.2 trillion annually in revenue while failing at its basic job: moving money quickly, cheaply, and safely.

Bitcoin almost fixed this

Bitcoin (BTC) was launched in 2009 and offered a potential solution: a peer-to-peer electronic cash system with no intermediaries. On paper, this solved the problems with our financial plumbing. But then something unexpected happened. The price skyrocketed from $0.40 to $29.60 in 2011. Then it crashed to $2. And now it is worth over $100,000. 

This volatility naturally killed its use case. Why buy coffee with something that might double tomorrow? The cash replacement turned into a speculative casino chip, now known as “digital gold.” 

Enter stablecoins: Bitcoin’s boring (but brilliant) cousin

In 2014, some innovators realised we could have the benefits of Bitcoin, but without the inherent volatility. Enter stablecoins — digital dollars that stay at $1.00. Tether (USDT) launched first, followed by USD Coin (USDC). And we now have over $200 billion in stablecoins across various blockchains. 

Businesses are reaping the benefits of stablecoins. Cross-border remittances are 60% cheaper than traditional methods, B2B settlements are instant instead of three days, and there is no capital trapped in correspondent accounts. 

Naturally, the numbers are exploding. In 2024, stablecoins processed $27.6 trillion, and there was a 59% year-on-year growth. This is not a gradual adoption; it is a fast and brutal takeover.

The current winners

There are a few companies that are excelling at using stablecoins. ALT 5 Sigma makes crypto payments invisible to merchants. Zeebu settles cross-border payments instantly and has transparent fees. And MoneyGram, the 150-year-old remittance giant, is expanding aggressively into stablecoins — and winning. 

The pattern is that instead of talking about blockchain, they focus on solving customer problems and providing unique benefits, without mentioning the underlying infrastructure, which many are still skeptical about.

Everything is about to change

Stablecoins are already threatening the payments industry, but we are about to witness the perfect blend of regulatory conditions and technological advancements that will lead to the death of traditional payments. 

The regulatory floodgates are about to open. The United States GENIUS Act is about to set the rules for USD-backed stablecoins, Europe’s MiCA Regulation is coming into force, and various jurisdictions across Asia and the Middle East are creating comprehensive and clear frameworks in a race to attract crypto and stablecoin businesses. 

Banks are finally getting on board. JP Morgan has launched the JPM Coin, while the Bank of America is hiring crypto teams. And the traditional payments incumbents, Visa and Mastercard, are building their own networks. 

In a particularly exciting development, yield-bearing stablecoins are also about to explode. Why hold normal dollars when stablecoins pay 5%? And by 2028, stablecoins are expected to save over $26 billion annually on cross-border payments. The math is obvious, and the writing is on the wall. 

We are watching the biggest transformation since credit cards. The companies that capitalise on this—and select the right infrastructure — will thrive. Those that don’t will join the likes of Blockbuster, wondering what happened. 

Ten years from now, the payments industry as we know it will look profoundly different. 

Manthan Dave

Manthan Dave is the co-founder of digital asset custodian Palisade, where he leads the engineering team. Before co-founding Palisade, he was a Senior Software Engineer at Ava Labs, where he drove innovative solutions across Avax and EVMs. Prior to this, Manthan was a Staff Software Engineer at Ripple, contributing to the development of cutting-edge systems such as On Demand Liquidity payment settlement orchestration and algorithmic trade execution. Manthan holds a Bachelor of Engineering from the University of Greenwich.