Do you remember the old time when you call or send a message by SMS outside the country costs money? With the help of modern messaging applications like WhatsApp, paying for calls and cross -border SMS is now obsolete.
For fund transfers, the stablecoins could do exactly that: democratizing the payment industry by eliminating the historic guards, explains Andreessen Horowitz (A16Z), venture firm.
“Just as WhatsApp has disrupted costly international telephone calls, blockchain payments and floors transform global monetary transfers,” the firm said in a blog article on Wednesday.
The current global payment infrastructure is a complex web involving points of sale, payment processors, acquired banks, issuing banks, corresponding banks, foreign exchanges and card networks.
Read more: What is a Stablecoin?
To make things more difficult, each of these intermediaries invoices costs and introduces delays, making international transactions heavy. For example, A16Z claims that discount costs can reach up to 10% – just like cross -border calls or text were used before instant messaging applications are at stake.
Enter blockchain and stablecoins – cryptocurrencies torn from assets like the US dollar.
“The Stablecoins offer an alternative to clear display. Instead of sewing clumsy, expensive and obsolete systems, the stablecoins flow transparently over the world blockchains,” said the blog post.
“Already, Stablecoins reduce the cost of funding: sending $ 200 from the United States to Columbia using traditional methods will cost you $ 12.13; with Stablecoins, it costs $ 0.01.”
And, it is not only the shipments of funds where the stablecoins eliminate ineffectiveness; This could also help increase B2B payments on a large scale. A16Z uses commercial transactions from Mexico to Vietnam as an example, which take three to seven days to treat and cost between $ 14 and $ 150 per $ 1,000 transgrated. These cross up to five intermediaries along the way, each taking a cut.
The adoption of Stablecoin could make these transactions almost free and instant, he says.
Some companies have taken note, and SpaceX from Elon Musk already uses stablecoins to manage their corporate treasury bills to protect themselves from the volatility of the FX.
Thus, it should not surprise anyone to see that the total market capitalization of Stablecoins adopted $ 200 billion or that the annualized transaction value of stablescoins in 2024 reached $ 15.6 billions of dollars – around 119% and 200% that of Visa and Mastercard, respectively.
However, the rise of stablecoins is not without challenges.
The regulatory organizations have examined their use, which makes “incredibly difficult” to fill traditional finances with stablecoins, said A16Z. The landscape is finally evolving, because political decision-makers are now actively shaping rules to recognize and regulate stablecoins in the United States “a next bill clarifying this regulation could open the way to an even wider adoption and integration in the global financial system,” said the blog.
With the rapidly evolving landscape of finance and the increasingly common crypto, stablecoins could become the transformative force which revolutionizes the future of money.
“Just as WhatsApp has disrupted costly international phone calls, blockchain payments and stablescoins transform global monetary transfers,” added A16Z.
Read more: Us House Committee advances the Stable bill, while the DESS warns against Trump conflicts
