Stablecoins have entered mainstream conversation following the landmark passage of the GENIUS Act in the United States. For an asset class that has long lived in regulatory ambiguity, it’s a watershed moment. The law sets clear standards for the issuance, reserve backing, and redemption of stablecoins, potentially unlocking mainstream adoption for their most promising use case: cross-border payments.

Stablecoins have been around for over a decade. Pegged to fiat currencies like the US dollar, they combine the trust of traditional money with the advantages of internet-native infrastructure—instant settlement, 24/7 operability, and global accessibility. Despite these benefits, they currently account for less than 7 per cent of the total crypto market, with a market capitalisation of around $264 billion, according to CoinGecko. That could grow substantially though, if their adoption for cross-border payments picks up steam.

The case for stablecoins in cross-border payments

Cross-border payments with stablecoins are a world away from the traditional correspondent banking system, run on rails like the SWIFT network that the financial system has used for decades.

Large corporations might have reconciled to the high fees, long wait times and blizzard of paperwork usually required to send money through this route, but smaller businesses and individuals are increasingly voting with their feet. That’s especially true for freelancers or contractors in some Asian, African and Latin American countries, where dolLar availability is low, the local currency fluctuates wildly in value and domestic banks are not deeply integrated with global correspondent banks.

There’s also growing adoption of stablecoins for remittances, treasury flows, and B2B settlements. Remittance providers are using stablecoins for just-in-time funding, cutting down on expensive pre-funded accounts. Large multinationals are experimenting with stablecoin-based treasury operations, while fintechs are building platforms that rely on them for real-time global transactions.

Growing institutional support

Financial institutions are joining in. JPMorgan has launched its own stablecoin. Visa is piloting cross-border settlements using USDC, and Mastercard has a Multi-Token Network for blockchain-based payments. Regulatory clarity is also emerging in jurisdictions from the US to the UAE.

Yet the path to real-world adoption is winding. One of the most misunderstood issues is the so-called “stablecoin sandwich.” While blockchain transfers are quick and low-cost, users must first convert fiat currency into stablecoins and then back into fiat on the other side. These on- and off-ramps add cost, complexity, and regulatory hurdles, particularly in emerging markets.

Another misconception is that stablecoins automatically enable instant global transfers. While the blockchain leg may be fast, fiat conversion still depends on the speed of local banking systems.

A complement, not a replacement

Stablecoins are unlikely to replace traditional systems entirely. In developed markets, networks like SWIFT and SEPA already serve most use cases well. But in emerging economies where access to dollars is limited or capital controls are in place, stablecoins can fill essential gaps.

Take India, for instance. The country received over $129 billion in remittances in 2024, but cross-border payments remain expensive and slow. SWIFT transfers can take up to three days, with transaction fees ranging from 3 to 7 percent. That adds up to billions in lost value annually.

India’s regulatory stance mirrors many emerging economies: cautious but observant. While acknowledging the potential efficiencies that stablecoins could offer, the Reserve Bank of India (RBI) has emphasized the importance of maintaining monetary sovereignty, managing capital flow risks, and ensuring macroeconomic stability. Concerns have also been raised around how privately issued digital currencies might interact with existing regulatory frameworks and cross-border controls.

Instead, India has focused on regulated innovations like UPI-linked remittances and the rollout of a Central Bank Digital Currency (CBDC). These initiatives aim to modernize payments while maintaining policy oversight.

Overcoming implementation challenges

Apart from regulatory hurdles, the adoption of stablecoins also faces operational regulatory hurdles. Public blockchains run 24/7, complicating real-time compliance and raising concerns about fraud, money laundering, and illicit flows. Traditional banking hours further complicate customer support and dispute resolution.

Nonetheless, these challenges aren’t insurmountable. One of stablecoins’ most promising features is their programmability. Payments can be designed with embedded logic — for example, releasing funds only after certain milestones are met. This could enable smart escrow, milestone-based payouts, and dynamic settlements in global trade.

There is also the broader question of monetary sovereignty. Widespread use of dollar-backed stablecoins in emerging markets could spur informal dollarization, undermining local central banks. Policymakers will seek to strike a balance between innovation and financial stability.

The most important ingredient for adoption, however, remains trust. Initial forays by respected institutions like Visa, Mastercard and JPMorgan in this space underscore the growing acceptance of stablecoins as a foundational evolution in payments.

The road ahead

Citi Bank projects the global stablecoin market to at least double by 2030. Similar to past fintech innovations, adoption will mirror a familiar progression: consumers pave the way, followed by small and medium-sized businesses, and finally, large enterprises.

The real tipping point will come when major corporations treat stablecoins as cash equivalents on their balance sheets. For that to happen, the industry must mature significantly. This includes building trusted custody solutions, streamlining on- and off-ramp networks, and developing clear accounting and tax frameworks.

The GENIUS Act sets a strong precedent for other nations to develop their own stablecoin frameworks, a process already underway in regions like the EU, Hong Kong, Singapore, and the UAE. For emerging markets like India, this could involve regulated pilots, partnerships with private issuers, or integration into controlled cross-border corridors.

While the groundwork is set for stablecoins to become a critical parallel layer in international payments, the journey is just beginning. Broad adoption will hinge on resolving practical issues around conversion, interoperability, compliance, and most importantly public and user trust.

The author is Co-Founder and CEO of Skydo, a cross-border payments platform

Published on September 15, 2025