International transfers are still relatively expensive and often take days. There is an alternative gaining momentum though: stablecoins are becoming a serious new system for international payments. Lukas Kunert explains the technological components and looks at how traditional banks are reacting to this development.
International payments are a bit like international phone calls: there was a time when those were very expensive, too and you had to think carefully about whether a call was worth the cost. Then came Skype – and suddenly it was possible to make free calls from anywhere in the world, and even with additional image transmission. This technological innovation did not replace the existing system overnight, but it changed the entire industry in the long term.
Today, it is possible to make audio or video calls in virtually any messenger app. Skype, which will soon be discontinued, paved the way for this. A similar thing could happen with stablecoins. I consider these crypto tokens, whose value is always linked to another value such as the US dollar, as the next stage of development in foreign payment transactions. (For a more detailed understanding of stablecoins, please read “Behind the hype I: Stablecoins explained simply“).
The advantages of stablecoins for international payments are obvious: transactions can be processed in seconds, fees are significantly lower compared to conventional bank transfers – depending on the blockchain used they tend towards zero – and blockchain technology ensures that money flows are traceable at all times. Regardless of whether international transfers are made using the SWIFT system or services such as Wise, the current methods of international payments are slower and more expensive compared to what stablecoins offer.
They can be a sensible alternative, particularly in regions with a weak banking infrastructure. In many of these markets, traditional banking services are not even available or a large proportion of the population is unbanked, meaning they do not have access to their own bank account.
For international transfers with stablecoins to work, an infrastructure with these components is required in the background
To be honest, those are still quite a few steps and a lot of know-how is required to make an international transfer via stablecoin. Skype has revolutionized international telephony calls because you didn’t have to be an expert to make a call.
However, there are already companies that make stablecoin transfers abroad almost seamless and simple, much like video calling in a messenger app. Espresso Cash, for example, is a user-friendly and easy-to-understand stablecoin-based payment platform for African markets. Senders can make payments in the app using USDC, which is pegged to the US dollar, and recipients can either take out the money in Fiat-currency. Or they leave the money in the app until they really need it which means that Espresso Cash even indirectly has built-in inflation protection.
Payments are even more seamless with Félix Pago, a start-up for payments between the United States and Latin America. Latin American immigrants can use it to send money to their home country via WhatsApp bot. The structure behind this is exactly as shown above: wallets are opened in the background (on the Latin American cryptocurrency platform Bitso) and then money is sent in stablecoin – all without users having to open a bank account themselves or first understanding the details.
These examples show that technological progress in this area is already enormous. However, despite all the enthusiasm for the tech side, it must also be noted that – particularly from the perspective of the financial sector – it is still uncertain exactly what some developments will mean in regulatory terms.
At least the new MiCAR regulation finally brings clarity, as already explained in the first part of this article. MiCAR has provided clear guidelines for stablecoins since the beginning of 2025; among other things, it is made clear that the stablecoins are very different from their speculative cousins such as Bitcoin or Ethereum. This also shows their primary purpose as being payment applications. And with MiCAR, for the first time ever, corporates can get involved in the stablecoin market without entering into legal gray areas.
There are already some banks that are approaching the topic. For example, Commerzbank, whose subsidiary we are as neosfer, is looking at the area of custody for crypto assets. Neobank Revolut has announced its own stablecoin, and Nubank is serving the crypto-affine Brazilian market with a wallet and exchange solution.
Many in the banking sector are still massively underestimating the importance of stablecoins and seem to believe that it is just some crypto hype. However, stablecoins are developing into a serious payment infrastructure that will evolve massively over the next few years and fundamentally change foreign payment transactions. Stablecoins and blockchain-based payment systems are not a hypothetical vision of the future. And anyone in the field should therefore no longer ask whether this will actually happen, but only how quickly. And then set the course so as not to lose touch.
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