My parents can book a Jet2holiday to Tenerife, pay instantly by card, and receive confirmation within seconds. Yet when a corporate treasurer in Singapore needs to settle a supplier invoice in Nairobi, the money crawls through an opaque network, and costs a small fortune in fees.

The bank quotes two days for cross-border settlement, a 2% spread, and correspondent fees. Instead, the corporate treasurer opts for a digital dollar. Within minutes, her counterparty receives USD Coin (USDC), redeemable 1:1 for fiat, verified on a public ledger.

For a typical US$100,000 cross-border B2B payment, traditional banking rails can cost around 1.5–2%, roughly US$1,500–2,000 in fees and spreads, and take several days to clear.

A regulated stablecoin transfer on low-cost blockchain rails can settle in minutes at a fraction of the cost, often just a few hundred dollars once conversion fees are included.

This is not the blockchain hype of 2017 reborn, rather, the arrival of stablecoins as a practical tool for cross-border business-to-business payments, treasury operations, and trade settlement.

A new BAFT whitepaper argues that their potential lies not in revolution, but in refinement: using digital dollars to solve problems that traditional cross-border finance has long tolerated, which reduces speed, cost, and transparency.

What stablecoins are, and are not

Stablecoins are digital representations of fiat currency, typically backed by cash and short-term government securities. The leading issuers, Tether’s USDT and Circle’s USDC, collectively account for more than US$220 billion in circulation, settling over US$250 billion in transactions daily, according to data aggregated by CoinMetrics and JP Morgan Global Research.

Crucially, stablecoins differ from both Bitcoin and blockchain. Bitcoin is a volatile asset; blockchain is the infrastructure that records transactions.

A stablecoin is not a commodity like sugar nor a chain, it is a digital liability backed by fiat reserves, moving on blockchain rails to enable near-instant settlement.

Where early blockchain projects promised to “revolutionise trade” through tokenised letters of credit and distributed ledgers, few delivered measurable efficiency gains.

Stablecoins, by contrast, are already doing what was once an aspiration: settling cross-border value with finality, reducing reconciliation costs, and offering programmable money for conditional payments.

Adopting stablecoins

The appeal is real. Cross-border transactions routed through correspondent networks often take three to five business days, with aggregate costs between 2% and 7% of transaction value once fees, FX spreads, and float are accounted for. Add to that the oft reported cutting of corresponding banking lines, particularly in emerging and developing markets, often shutting out entire economies from access to USD liquidity. Stablecoins can settle the same flows in minutes, with fees below 0.5%, sometimes lower, when both parties operate on the same chain.

For corporate treasuries managing cash across entities and time zones, stablecoins promise continuous settlement and real-time liquidity visibility, reducing idle balances and timing arbitrage.

Programmable payment logic can trigger releases upon document verification or inventory delivery, aligning with the conditional nature of trade finance instruments.

The technology’s appeal extends to supply chain finance and invoice discounting, where atomic settlement, cash and title moving together, can shorten working capital cycles and reduce counterparty risk. For MSMEs, often locked out of traditional access to credit, stablecoin rails could widen participation by offering transparent, verifiable transaction histories that improve credit assessment.

Scale, stability, and supervision

The market has grown rapidly.

According to Forbes and JP Morgan, USDT’s market capitalisation exceeds US$140 billion, while USDC hovers near US$35 billion.

Combined, they represent 99% of the stablecoin sector, itself roughly 7% of the US$3 trillion crypto ecosystem. Yet, they facilitate real-world flows far beyond speculative exchanges. Stablecoin transfers now routinely outpace Visa in daily on-chain volume.

This scale brings scrutiny. Regulators worry about deposit flight from traditional banks, reserve quality, and redemption risk. Rightly so, and they’ve acted swiftly.

The US GENIUS Act, signed in July 2025, sets federal standards requiring 1:1 backing in cash and Treasuries, full disclosure, and supervised custody.

In Europe, the Markets in Crypto-Assets (MiCA) framework treats fiat-backed stablecoins as e-money tokens, imposing stringent liquidity and segregation rules.

China, meanwhile, bans private crypto issuance altogether, preferring to advance its own e-CNY as a state-controlled alternative.

While oversight tightens, adoption continues. Stablecoin circulation has doubled in 18 months, yet still accounts for less than 1% of global money flows.

Institutional uptake remains early but is shifting. In Deloitte’s Q2-2025 survey of large-company CFOs, 23% expect their treasuries to use crypto for payments or investments within two years and 15% expect to accept stablecoins.

In parallel, the ECB’s digital euro advances (decision after Oct 2025; launch around 2029 if legislated), Project mBridge has reached MVP for cross-border wholesale CBDC, and e-CNY continues large-scale pilots.

The likely end-state is hybrid: CBDCs for public money, tokenised deposits for bank money, and regulated stablecoins for programmable cross-border liquidity.  

Beyond the hype cycle

The difference between this moment and the blockchain exuberance of the late 2010s is measurable utility.

Earlier DLT projects promised to eliminate friction but often introduced new complexity, relying on consortia, proprietary standards, and limited interoperability.

Stablecoins, by contrast, operate on open, widely used networks and integrate with existing banking, ERP, and payments infrastructure.

They are not a wholesale replacement for bank money but a complementary liquidity layer. In the Gartner hype cycle, blockchain has drifted through disillusionment; stablecoins are entering the slope of enlightenment, where incremental, regulated adoption outpaces marketing claims.

Risks of stablecoins

Stablecoins are not risk-free. Their resilience depends on the quality and transparency of reserves, the robustness of redemption mechanisms, and the stability of the underlying blockchain.

Disruptions are rail-agnostic. In August 2025, PayPal’s systems failure in Germany stalled ~€10 billion of payments; in July 2025, a three-hour Nets outage froze card payments across Denmark and parts of the Nordics, spurring plans for offline card back-ups. The lesson isn’t that blockchains are flawless—but that resilience and supervision matter on every rail.  

And then there’s control. Issuers lack access to central bank backstops, leaving them reliant on market liquidity during stress. Concentration in short-term Treasuries amplifies exposure to rate shocks.

Yet, compared to uncollateralised algorithmic models such as TerraUSD, fiat-backed stablecoins could represent a more credible instrument.

Properly supervised, they may enhance rather than threaten financial stability, by reducing settlement lags, improving transparency, and lowering operational risk.

For banks and corporates, the prudent path is measured integration: using stablecoins for specific corridors or settlement layers while maintaining conventional funding relationships. The goal is not disintermediation, but augmentation.

Implications for trade and treasury

In trade finance, stablecoins could underpin digitised letters of credit, e-bills of lading, and tokenised receivables, enabling delivery-versus-payment without manual reconciliation.

Coupled with enabling laws built on the adoption of UNCITRAL’s Model Law on Electronic Transferable Records (MLETR), or their equivalents, such as the UK’s Electronic Trade Documents Act (ETDA), they complete a digital chain of title and value, finally matching the promises of trade digitalisation.

In treasury, they support intra-group transfers, cross-border cash pooling, and on-demand FX hedging.

For emerging and developing markets where USD liquidity is hard to come by, or banking infrastructure remains thin, they offer access to stable value without reliance on intermediaries.

Happily ever after?

Stablecoins are not the end of banking, but also, not a passing fad.

They are a pragmatic innovation addressing long-standing inefficiencies in cross-border payments and trade finance.

Properly regulated, they could form part of a hybrid financial architecture where CBDCs, tokenised deposits, and private stablecoins coexist, each serving distinct functions.

For treasurers, exporters, and financiers, the question is no longer whether stablecoins belong in the conversation, but how to adopt them safely, strategically, and at scale.

Nothing beats a Jet2holiday than click, pay, confirm, done. But in cross-border finance, a well-regulated stablecoin might come close.