Do you remember the old days when calling or sending a message by text message outside the country cost money? With the help of modern messaging applications such as WhatsApp, paying cross -border calls and text messages is now obsolete.
For money transfers, Stablecoins could do exactly that: democratize the payment industry by eliminating historical guardians, says Risk firm Andreessen Horowitz (A16Z).
“Just as WhatsApp interrupted the expensive international telephone calls, Blockchain payments and Stablecoins are transforming global money transfers,” the firm said in a blog post on Wednesday.
The current global payment infrastructure is a complex website that involves points of sale, payment processors, acquiring banks, issuing banks, corresponding banks, foreign exchanges and card networks.
Read more: What is a stablecoin?
To hinder things, each of these intermediaries charge rates and introduces delays, which makes international transactions cumbersome. For example, A16z says that remittance rates can reach up to 10%, as well as cross -border calls or the text used to be restrictive before instant messaging applications came into play.
Enter Blockchain and Stablecoins: cryptocurrencies linked to assets such as the US dollar.
“Stablecoins offers a little clean alternative. Instead of joining clumsy, expensive and obsolete systems, the establishments flow perfectly in the upper part of global blockchains,” said the blog post.
“Already, Stablecoins is reducing the cost of remittances: sending $ 200 from the US to Columbia using traditional methods will cost you $ 12.13; with Stablecoins, it costs $ 0.01”.
And, it is not just remittances where the stables are eliminating inefficiencies; This could also help increase large -scale B2B payments. A16Z uses commercial transactions from Mexico to Vietnam as an example, which takes three to seven days to process and cost between $ 14 and $ 150 for $ 1000 transacted. These pass through up to five intermediaries along the way, each of which takes a cut.
Stablecoin’s adoption could make such transactions almost free and snapshots, he says.
Some corporations have noticed, and Spacex by Elon Musk is already using Stablecoins to administer its corporate treasure bonds to protect themselves from FX’s volatility.
Therefore, no one should surprise that the total market capitalization of Stablecoins has spent $ 200 billion or that the annualized transaction value of Stablocoins in 2024 reached $ 15.6 billion, approximately 119% and 200% than that of Visa and Mastercard, respectively.
However, the emergence of Stablecoins is not exempt from challenges.
The regulatory bodies have analyzed their use, which makes it “incredibly difficult” to close traditional finances to Stablecoins, A16z said. The landscape is now evolving, since policy formulators are now actively giving rules to recognize and regulate stabilizations in the United States “an upcoming bill that clarifies this regulation could pave the way for an even broader adoption and integration in the global financial system,” the blog said.
With the panorama that changes rapidly for finance and cryptography, they become more conventional, the stables could become the transformative force that revolutionizes the future of money.
“Just as WhatsApp interrupted the expensive international telephone calls, Blockchain payments and Stablecoins are transforming global money transfers,” A16z added.
Read more: the United States Chamber Committee progresses the Stablecoin bill, while Democrats warn about Trump’s conflicts
