Stablecoins are emerging as one of the clearest near-term use cases for transforming cross-border payments, according to a report from accounting firm KPMG published last month.
Banks currently rely on a correspondent banking network that moves about $150 trillion a year, the report said, a system that typically takes between two and five days to settle, involves multiple intermediaries and carries an average cost of $25 to $35 per transaction.
This infrastructure requires institutions to lock up large sums of money in nostro and vostro accounts around the world to ensure liquidity, KPMG said, creating inefficiencies that stablecoin technology is increasingly well-positioned to solve.
Stablecoins are cryptocurrencies whose value is tied to another asset, such as the US dollar or gold. They play a major role in cryptocurrency markets, providing 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 used. Transaction costs can also drop significantly, in some cases by more than 99% compared to traditional payment channels.
Lower pre-financing 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 importantly, these networks provide real-time monitoring and auditability, replacing the opacity of the current system with a level of transparency consistent with evolving regulatory expectations.
KPMG noted that some large financial institutions have already started transferring real value on blockchain rails, demonstrating early adoption of this model. JPMorgan (JPM), for example, processes approximately $2 billion in daily transactions on its blockchain platform.
Meanwhile, PayPal (PYPL) launched its own stablecoin in 2023, which has since reached a market cap of $1.17 billion.
These developments, according to KPMG, signal a clear market appetite for further expansion of cross-border payments powered by stablecoins and highlight how digital assets are reshaping the global financial infrastructure in practical and revenue-generating ways.
Learn more: Stablecoins will disrupt cross-border payments, says investment bank William Blair
