Stablecoins are emerging as one of the clearest near-term use cases for transforming cross-border payments, according to a report last month from accounting firm KPMG.
Banks currently rely on a correspondent banking network that moves approximately $150 trillion a year, the report notes, a system that typically takes two to five days to settle, involves multiple intermediaries and carries an average cost of $25 to $35 per transaction.
This infrastructure forces institutions to hold large sums of money in nostro and vostro accounts around the world to ensure liquidity, KPMG said, creating inefficiencies that stablecoin technology is increasingly better positioned to solve.
Stablecoins are cryptocurrencies whose value is pegged to another asset, such as the US dollar or gold. They play an important role in the cryptocurrency markets as they provide 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 accounting 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 be drastically reduced, in some cases by more than 99% compared to traditional payment methods.
Lower pre-funding requirements ease pressure on capital, improving overall liquidity and freeing up resources that would otherwise be trapped in dormant accounts, the report said.
Just as important, 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 started moving real value across blockchain rails, demonstrating early adoption of this model. JPMorgan (JPM), for example, processes about $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, indicate a clear market appetite for further expansion towards cross-border payments powered by stablecoins and underline how digital assets are reshaping global financial infrastructure in practical and revenue-generating ways.
Read more: Stablecoins will disrupt cross-border payments, says investment bank William Blair
