gAirwallexBVNK白CIRCLE230.0INTRODUCTION3whilelandmarkregulationisbringingstablecoinsdeeperintothetraditionalendscaseshappening.It'snotsomButaswithanytechnologyattractingsuchandtheirapplicationsinpaymentsthatstruggletoholduptoscrutiny.“SometimeswhenyouscrollthroughLinkedInorattendconferences,itfeelslikestablecoinsarebeinghypedasthesolutiontoeverything–likethey'reabouttosolveworldhungerorcurecaprovider.Themarketisfast-moving,withmanyplayersseeingrapiddevelopmentofboththeirbusinessesandthemixofcompaniesthatareengagingwiththem.It’sclearthattherearebenefitstobehad,butwithattimessignificanttechnicalcomplexitysurroundingstablecoins,understandingwheretheyliecanbecompaniesacrosstheindustry,itprovidesadetailedprimeronthestateoftheindustryandwheretheopportunitieslie–includingthecurrenttotaladdressablemarketforcross-borderpaymentsusingwhichyoucanaccessattheendoftherIntelligenceissupportingcompaniesenteringorworkinginthestablecoincross-b4542455transformation,bothintermsofhowtheindustryperceivesthemandthetypesof“It'schangedmorerapidlyoverthelasttwoB2Bpaymentsplatform.“Nowwe'restartingtoseemoreandmorethey'rerecognisingthenextwave.”time.“Thereisarecognitionnowoftheutilityofthetechnology,whichhasbeenindevelopmentChiefExecutiveofOpenPayd,afiat-led gcIRclEStablecoinshavetheirrootsinthe2008inventionofcryptocurrency:atokenised,decentralisedandimmutableformofdigitalcurrencyrunnfirstemergedwithbitcoin,whichwasintroducedtotheworldinOctoberofthatyearwhenanFromtheoutset,bitcoinwasframedasameansofmakingonlinepaymentswhilebyforfinancialintermediaries.However,whiletherewassomelimitedpaymentsexperimentationfromitsearlyadopters,itlargelygaincryptocurrencyforspeculation.Asinterestgrewoverthenextfewyears,thereweresomeattemptstocapitaliseontheunderlyingtechnologyforcross-borderpayments.Butmanystruggledtotakecryptoseriouslyasatechnologyforassociationswithblackmarketactivity.Thatchanged,however,withtheintroductionofthestablecoin:akeymomentinthedevelopmentofblockchain-basedtechnologiesthatsawitmovefromtheequivalentoftheearlyinternettothebeginningsofthemodernera.thiswasbackedbycryptocurrency,itdoesnotfullyfitthedefinitionofwhatweknowasastablecointoday.Othersquicklyfollowed,butitwasTetherwhointroducedtheideaofreservesinfiatcurrencywhenitfacedquestionsaroundtransparencyandregulationandultcomingnotonlyfromthecrypto-ledspace,butsomeinthemainstreamfinancialindustry.Meanwhile,However,stablecoinsfacedsomethingofacrisisincoWhileUSTwasnotaconventionalstablecoin,thereputationaldamagefortnotable,despiteattemptsbyCircle,PaxosandotherstodistancethemselvesfromthealgorAtthetimeofthecollauncertaintyaboutwhetherthedepositswouldbeguaranteed.Thispromptedwhatbecameknownasavalue,whichleditstradingvaluetodroptoitslowestgenuineriskofbeingunabletoredeemholdingsofUSDC,thereputationaldaWhileoverseas-basedUSDTcontinuedtoseeadoptionclimb,US-basedUSDCsawtokensincirculationdeclinesteadilyover2023.Slowly,however,astreamlined,morewereseeingtheirvolumesandadotherswerelaunchingproductsfocusedonthegenuineutilitytheysawwhileothersworkedtoeducatethoselesssureofstablecoinstobuildbothregulatoryframeworksandgreateradoption.Fromearly2024,USDC’snumberoftokensincnewlaunchesfocusedonpaymentscontinuedtogrow.ThemorerecentreturnofDonaldTrumptotheUSpresidencyhasalsoincreasedinstitutionalsupportforthetechnology,withincomingregulationintheformoftheGENIUSAct.“CertainlysincetheUSadministrationhaschanged,majorfinancialinstitutionsareappcompanieslikeoursforhelponwhereandwithwhomtheycanstarttoworkwithstablecoinsinaNow,withadoptionclimbingmorerapidlyandthecross-borderpaymentsindustrytakingsignificantinterest,thereisfurthergrowthonthehorizon,buttheessentialprincipleofstablecoinsremainsmuch“We'resolvingforcashontheinternet,”explainsNikhilChandhok,ChiefProduct&Technology22008-20132018-20212018-2021ripplepaypalFireblocksBVNKCRCLEactivity”,thereisgrowinginterestintheirusewithinthesector,whichbuildsoninterestin“Thejourneywithstablecoinsstartedonthetradingandinvestmentside,andthenslowly,through2022,2023,itmanagedtogetapr“Initially,itwasmostlycompaniesthatwerebasicallycrypto-nativepaymentplayersthatwerehelpingtheirendbusinessestomovemoneymoreefficientlybetweenthosecorridors.”payments-focusedConduit.Howeve“Iseeamajorshiftwherealotofcompanies,especiallylargermultiinternationalbusinesspaymentThishasalsoseenpreviouslyfiat-focusedprovidersofcro“Thatevolutionforuswascompletelyorganic,simplybecausewehadanumberounderservedwithoutbeingabletoprovidethatinteroperability.”otheraspectsofcross-borderpayments,includingMoneyGram,whichbeganofferingtheabilitytowhite-labeldigitalwalleton-rampingandoff-rampingsolutionMoneyGramRamps,aswellas“Stablecoinsaregoingtoplayaevensharperjump,increasingbymorethan1,000%.overwhelmingmajorityofthoseinthepaymentsindustryarerecognisingopportunitiesinthetechnology,eveniftheyarenotyetpubliclydpipelinethatwehave,it'sdefinitelytraditionalpaymentcompaniesthatareleaningin,evenonesthatyouwould'vethoughtwouldn'tbeleaningin.”mentioningAlongsideinterestfromestablishedplayers,morebroadlychallengingventurecapitalenvironment,stablecoinshavebeenattrac“Primarilyinvestorsareattractedtothepossibility“Whentheysawourtractionintermsofrevenueandintermsofvolume–howquicklytheadoptioncurveisgrowing–theywerereallyinterestedbecauwinamuchlargermarketthanwehaon/off-ramping*noah渠2020T」LIMITED2024V三L。CITY渠20252021$36mnexleneralion2023$5m半MANSA〓2024ofstablecoininfrastructureplayerBridge,announcedin2024andcompletedinearly2025,iswidely“Itpromptedaseriouslooktheworld'slargestpaymentcompanies,butitjustaccwiththemove.almosthelpedcreatethecurrentstablecoinphenomenon.”20222024暈“9-figures”2022嘌nexgeneraion20212021*Theinherentargufrontsthancurrentlydominantapproaches.“Whenyoustackupstablgottodooncost,whichmoreliquiditydrives.”complexitiestodeliveringstablecoinpaymentsthatcanmakeitchallenging,andthefremainsthattherelativelysmallscaleofthetechnology’suseforpaymentsmeansthereHowever,attheheartofundstablecoinsandtheirpotentialforcross-borderpaymentsisthis:fromthecustomer’s“Usersdon'tgivead100%truthful;underlinethat,”saysHiglobe’sthey'vecaredaboutforthelast3,000yearsofmoneytransfers.Numbernumbertwo,speed;andnumberInstead,wherestablecoiprovingoutiswheretheyaredemonstratingagenuine,reliableimprovementonthepaymentsstatusquo,andthat,atleastfornow,isoverwhelminglyintheemergingBVNKFrompaymentinfrastructureplayerswhohavebeeninstablecoinsfromtheoutset,tothoseonlyrecentlymovingintothesector,theargumentforstablecoinsisextremelyconsistent:marketswherepaymentsinfrastructureispoornotonlyrepresentacriticalcurrentmarketforstablecomanywaysdriventhedevelopmentofstablecoin-basedcross-borderpaymentsasanindustry.“Globalmarketplacesthathavereallyfeltthepainpointofeithercollectingordispersing,orholdinginmarketswheretheinfrastructureisnotwell-developed,”explainsOpenPayd’sDimitrov“Theyhavebeenexploringalternativesonhowtosolvetheirproblemsquietlyinthebackground.It'sjustthattheestablishmentoftraditionalfinancialinstitutionsarefinallyrecognisingthis.”Thisnotonlyincludesthoselookingtomoreaffordablyandefficientlysendmoneyacrossborderstoandfromsuchmarkets,butalsothoseinternationallyorwithchallenginglocalcurrencyenvironments.wherewecouldprovidethemaB2Btypewalletandthensettlewiththemwithstablecoin,”saysLukeTuttle,ChiefProductandTechnologyOdemand.However,itisclearthatthesignificantandgrowingvolumeofpaymentsalongwhatareoftendescribedasexoticcomovedtofulfil,withincreasinglysophisticatedclientsamongtheircustomerbase.“We'reworkingrightnowwithanairlinethatneedstobeabletocollectpaymentsinanumberofcountriesinAfricaandsen“There’sthiswaveofinterest,andtotheextentthattheycanfigureoutwhattheusecaseisquickly,they'rejumpingin.”emergingmarkets,whoareoftencrucialtofacilitatingtheon-rampingandoff-rampingprocess,as“Wehavealotoflocalpartnersaroundtheworld,sowecouldprobablysupport80-90currenciesWhenusedtofacilitateapayment,stablecoinsthemselvesareonepartofabroadertechnologystacAspartofthecustodylayer,thevirtualcoinsthemselvesaremovedbetweenholdinginstknownaswalletsonblockchainnetwoAbovethis,however,sitthesolutionsthatfacilitatemovementinandoutoftheblockchainspace,intheformofforeignexchangeandon-rampandoff-rampsolutions.Thesevarysignificantlydependingontheproviderandtheirnetworksolutions,butwilloftenincludeintegrationswithlocalbanks–aswellasliquiditysolutionstoensurethetokenscanbeconvmanycasesthesametheformoftheapp,software,interfaceorothermeansbywhichthecustomerinteractswiththeproduct. Includingfiatintegration Whiletherearesomevariations,theconventionalapproachtostablecoin-basedcross-borderpaymentstakestheformofthe‘stablecoinsandwich’,atermwidelycrediteWhileconventionalcorrespondentbank-basedtransactionsseeacross-borderpaymentbeingmovedthroughachainoflocalandtheninternationalbanks,withthecurrencyconversroute,thestablecoinsandwichinsteadseesmoneyconvertedfromthesendingfiatcurstablecoin,atwhichpointitismovedinternationallybeforebeingconvertedagaintotherecipient’sfiatThisisparticularlyappealing“Forpaymentsgoingintoemergingmarkets,youmighthavesixpaexplainsOrbital’sMason,givinganexampleofacross-borderpaymenttcorrespondentbanking“Sayifmycorrespondenbankswitharegulatoryobligationinthatchainandyoumighthavethreeontheotherside.Everyoneofthoseinstitutionswillwantvisibilityonthatpaymentbecauseit'sColombia,andallthebanksareopenatdifferenttimesoftheday.Sobeforeyouknowit,yourpaymenthasbeenwaitingtherefortwoweeksandthepeoplestillhaven'tgottheirmoney.”Thisisparticularlychallengingifthepaymentisforperishablegoodsorothertiservices,andultimatelyprovidesunhelpfulfrictionforandpresentsabarriertotheirabilitytooperateinternationally.Thestablecoinsandwichreplacesthispotentiallycumbersomechain,butitsendofthepaymentchaintobewillingandabletomovemoneyinandoutofstablecoinsatspeed.liquidityforsuchtransactio“Eventhoughthelocalbanksinsomeofthesemarketsarenotpartic“Ifsomeonegivesmeeuros,IautomaticallybuyUSDTinreal-timewithmyEuropeanliquidity“Thatisthegoldeneggincross-borderpayments,inmyview.It'ssomewhatdependentonthecapabilityintheemergingmarket,buteveryone'scatcThisabilitytorapidlyon-rampandoff-ramppaymentsfromstablecoinsiscriticaltoeffectivelydeliveringpaymentsathighspeedandlowcost,withthe‘lastmile’beingparticularlyvital.However,italsomeansthatthosewithstrongfoundationsinthefiatworldarewellpositionedtopivot.“Becausewecomefromthetraditionalfinancesideofthings,we'vealreadybuiltthatfirstandlastmileofcollectionanddisbursementoffiatrails,whichstillremainessentialfortheflow,andwe'renowjustabletoleveragethatnewtechnologyinthemiddletospeedupandratOpenPayd’sDimitrova.ratherthanconvertingbackintofiat,withFireblocks’Shaulovreportingthatthecompanyhas“startedultimatelybecomedominant.“Theweirdthingthatpeoplearegoingtohavetogettheirheadaroundisatsomepointpeoplearenotgoingtoon-rampandoff-rampanymore,”arguesMikeHudack,Co-FounderandCEOofSlingMoney,astablecoin-basedconsumermoneytr“It'sjustgoingtobemoneyonablockchain.Nobody'sgoingtocarisgoingtobepoweredbythestablecoininyourwalletorthetokeniseddepositinyourwallet.”However,whetherthiswillhamovingtothewholemarketfortheforeseeablefuture.“Forthenextfewyearsneedforinteroperabilityacrossfiatcapabilities Off-Rampwallet--withincryptoQuantifyingthecurrentopportunity,orindeedsize,ofthestablecoincross-borderpaymentsmarketisDatafromVisaandAlliumshowsthatthetotalvolumeofalltransactionsconductedusingallHowever,thevastmajorityofthesearelikelytobemoneymovementfortradingpIndividualplayers’ownreportsprovideamoredefinedpicturearoundhalfofwhichisinB2Bpayments,around20%oftheglobalB2Bmarketforstablecoin-basedcross-borderpayments,whileOrbitalestimatedsizeoftheentirecross-borderpaymentsmarketin2024was$194.8tnincludingwholesale,whilenon-wholesalepaymentsalonetotalled$40tn.Itislikelythatthecurrenttotalcross-borderpaymentsmarketusingstablecoinsisstillinthebillionmeaningthatislikelytoaccoun“Whenwe’retalkingaboutastablecoinmarketcapofaround$250bn–that’snothing,”saysourselvesworkingwithinstitutionsthatmovetrillionsofdollars.”Inordertodefinethecross-borderpaymentsTAMforstablecoins,weneedtodrawontheregions“Thelargestmarginsworldwidearenowatthatpointwherefundsaregoingfromthedevelopedworldintoemergingmarkets;outofemergingmarkets;orandthespeedofpaymentcanbearealproblem.”ThisopportunityisalsoreflectedinFireblocks’ownexperiences,withShaulovreporregionalcorridorsthecompanyiscurrentlyservingareintoandoutofLatinAmericafromtheUSandEurope;intoandoutofAfricafromEuropeand“somBasedonthis,itisreasonabletofrverticals,equivalentto41%ofthenon-wholesalemarket,whiletheupsidecaseis$23.7tnthenon-wholesalemarket.borderpayments,althoughthedifferencesbetweentheG10andG20domakeforsomekeykeycontributortotheupsidecase,butthereareothersthatdisproportionatelyforever,withsomeplayerssuchasBVNKreportinga“WeseeEast-to-Westflowsbecauseit'sdifficulttosendmoneyfromHongKongtotheUSemergingmarketinthere.”Whilethisprovidesasenseoftheopportunityataglgreatersenseofwherethecross-enablesustodeterminewhichcorridorsprovidethegreatestopportunityforstablecoin-basedpayments.regionsthatparticularlystoodoutaspresentingastrongopportunityforstablecoinsduetotheirSource:FXCIntelligencedataderivedfromFXC’sowndatasetscoveCentralAsiatoSouthAsiaandpSource:FXCIntelligencedataderivedfromFXC’sowndatasepotentialforinboundP2Pcross-borderpayments.Lookingatcombineddatafotheregionalcorridorswiththehighestpotentialforstablecoin-basedcross-borderpaymentsareSub-Source:FXCIntelligencedataderivedfromFXC’sowndatandfirmleveldata,FXCIntelligenceanalysis.*Estimated,limiteMeanwhile,therewerefewregionalcorridorswithverylowpotential,withpaymentssentwithinandB2Ccross-borderpaymentsusingstablecoins,althoughthereareliexceptionstothis.4.Whiletherearemyriadstablecoinsavailabletobuy,holdandtradeforcryptohaveutilityforcross-borderpayments.Partofthisistheirdesign,includiandtheleveloftransparencytheyprovide,butthereisalsothematterofthevolumeofthatstablecoin,andwhetheritcanbereliablyintegratedintoautomatedtechnologicalprocesissueortheabilitytoexcha“Thetwothingsthatreallyareimportantforstablecoinsareliquidity–enoughpeopleindifferentDifferentneedsandapplicationshaveprompteddifferentplayerstodeveloptheirownstablecoinsand,amongthosefocusedoncross-borderpayments-relatedapplications,theoverwhelmingmajoritythetwobiggeststablecoinsonthemarket,buttherearealsootherstablecoinswithsmallercirculatingsupplies–thetotalnumberofthatstablecointhathasbeenissued–thatarealsonotableduetothecompaniesbehindthem.acrossavarietyofPaySingaporearminNovemberthatisdesignedtocomplywithvariousinternationalframeworksforstablecoinsandformacorepartofitsrecentlylaunchedstablecDollarNetwork.beusedwithinitsowncross-borderpaymentnetworksCIRclE$62bnpaypal2023$849m20242024$352m2025(short-term)Source:FXCIntelligeWhiletherearemanystablecoinsevenwithinthepaymentsworld,USDTandUSDCaccountfortheoverwhelmingmajority,atmorethan80%oftheentiremarketcapitalisation.significantenoughinsunorthodoxassetsamongtheminThis,alongwiththesomeUS-basedfinancialinstitutionstobeveryreluctanttotouchUSDT,althoughmanyinthe“IpersonallythinkTethereasilyhasenoughfundstopropthatcoinupeveryminuteoftheday,”saysdifferentblockchainshavedifferentcapabilitiesthatcanimpacthowwellsuitedtheyareforpayments.currenttotalstandingat23.However,despitethisbroadavailability,themajorityofitscirsmallnumberofblockchains,withtheEthereumblockchainaccountingfor63%ofthemarketandthestablecoinsonTRON,itoptedtotransitionofftheblockchaininearly2024,citingregulatoryand-a40%40%Whilecompaniesusingaspecificstablecoinforcross-borderpaymentsarenotautomaticallylimitedtoasingleblockchain,theyarelikelytoopttoworkwitharelativelylimitednumberaseachonenotonlycreatingfrictionintheprocessifstablecoinshavetobemovedbetw