Every day, billions of dollars pass through blockchains via stablecoins. The market is dominated by USDT ($175 billion market cap) and USDC ($75 billion), but a growing ecosystem of new entrants is expanding the landscape. Stablecoins are no longer a cryptocurrency accessory: they are becoming one of the greatest financial innovations since the rise of electronic payments.
Their use cases are broad, but four stand out:
- Hedging in high-inflation economies
- Cross-border payments and remittances
- DeFi and programmable finance
- Trading and Liquidity
Of these, the cross-border and remittance use case has the greatest potential for growth. USD-denominated stablecoins quietly replace SWIFT for small and medium-sized flows, allowing money to move around the world in seconds, not days.
Stablecoins vs SWIFT: reinventing cross-border currency
What is disrupted is not SWIFT in general, but SWIFT, the global rail for dollar transfers. For decades, the US dollar has been the unit of account for world tradeand SWIFT is the messaging system that coordinates these flows. Now, instead of SWIFT as an intermediary, USD stablecoins themselves serve as a transmission rail: programmable, verifiable and available 24/7.
Stablecoins do not yet replace SWIFT on a large scale – they still represent less than 1% of global monetary flows – but in remittances, B2B payments and e-commerce, USD stablecoins are already becoming the fastest and cheapest complement to the traditional dollar hardwire system.
Speed, cost, adoption — here’s the comparison (2025):
The problem: two states of money
While USD stablecoins move instantly into the digital world, the real economy continues to function. local decree. This requires liquidity providers to connect two different states of money:
- Digital (USD stablecoins).
- Fiat (local currencies).
Today, this gap creates friction. Liquidity providers end up holding pesos, reals or naira overnight, unable to recycle their capital until banks reopen. The fintech or end user benefits from instant settlement, but the provider absorbs the cost of escrow balances. In force, Stablecoin adoption is capped by the size of provider balance sheets.
The solution: On-chain FX = one state
FX-on-chain protocols reduce the two-state problem into one state: digital. Instead of moving from stablecoins to fiat currencies via banks, FX-on-chain allows direct exchanges between USD stablecoins and local currency stablecoins.
This unlocks two key benefits:
- Instant conversion: USDC/USDT holders can sell directly into MXN stables, BRL stables, or COP stables, which can then be exchanged instantly for fiat.
- Stream matching: Global remittance flows (selling US dollars to buy local dollars) naturally respond to corporate or institutional flows (selling local dollars to buy US dollars). On-chain pools match them in real time, clearing exposures and recycling liquidity 24/7.
By unifying flows digitally, liquidity providers no longer face warehousing risk. Instead, capital continually flows down the chain – just like in global foreign exchange markets, but with instant settlement, reduced costs and transparent liquidity.
Looking to the future
Stablecoins are no longer just a bridge between crypto and fiat currency: they are becoming the the rails of world trade. From Argentine households hedging inflation, to Nigerian exporters paying their bills, to institutions arbitrating spreads, stablecoins are integrating everywhere.
The future hinges on three fronts:
- On-chain FX – bring together fiat and digital currencies into a single state to enable true multi-currency settlement.
- Regulations – define safeguards without stifling innovation.
- Non-USD Stables – the rise of euro, yen and local currency stablecoins to further localize adoption.
If the last decade was about bitcoin as “digital gold,” the next will be about stablecoins. “digital fiat” – currently only digital dollars and eventually digital fiat for everyone, everywhere.
