Stablecoins: The Key to Revolutionizing International Payments

In an increasingly globalized world, cross-border transactions play a critical role in the global economy. However, traditional international payment systems are often expensive, slow and complex, creating inefficiencies for businesses and individuals alike. In this context, stablecoins have emerged as a technological solution that is revolutionizing the way these payments are conducted.

The Challenges of Traditional Payment Systems 

• High Costs: Bank fees for international transfers range from 1.5% to 2.9% for B2B payments, while remittance costs can exceed 6% in some cases.
• Slow Processes: Transactions typically take 2 to 5 business days due to the involvement of multiple intermediaries.
• Lack of Transparency: Both senders and recipients struggle to track payment statuses, leading to uncertainty.
• Limited Access: In Latin America, 42% of the population lacks access to traditional banking services, according to the World Bank.
  
  

These challenges underscore the need for more efficient and accessible solutions. This is where stablecoins offer a paradigm shift.

Over recent years, stablecoin adoption has grown exponentially, as evidenced by their global market size and transaction volumes. According to recent data, stablecoins reached a market capitalization of $168 billion in 2024, facilitating nearly $7 trillion in transactions the previous year. This trend reflects their acceptance in emerging markets like Latin America and their potential to transform the global economy by eliminating intermediaries and reducing costs associated with international payments.



Advantages of Stablecoins in Cross-Border Payments
 

2. Lower Costs: Stablecoins eliminate many fees associated with international payments, limiting costs to blockchain network fees, which are significantly lower than traditional bank charges.

3. Financial Inclusion: In regions like Latin America, where many are underbanked, stablecoins offer an accessible alternative. With a smartphone and internet connection, anyone can send and receive international payments securely.

4. Transparency and Traceability: Transactions conducted with stablecoins are transparent and auditable in real time, thanks to blockchain technology. This reduces the risk of fraud and errors in payments.

Use Cases in Latin America

Latin America has been a significant adopter of stablecoins, driven by inflation, currency instability, and the need for more efficient financial solutions. Key examples include:

• International Remittances: In 2023, remittance flows to Latin America reached $156 billion, accounting for 17% of the global remittance market. Stablecoins have significantly reduced the costs and time of these transactions, a benefit that could also be replicated at the business level.
• Cross-Border Trade: Businesses importing and exporting goods use
  stablecoins to mitigate risks associated with currency fluctuations.
• Payments to Freelancers: Professionals in Argentina and Colombia are adopting stablecoins to receive payments from international clients without incurring high intermediary costs.
  
  

Challenges and the Future of Stablecoins

Despite their advantages, stablecoins face significant challenges, including unclear regulatory frameworks and the digital divide in various regions. The lack of specific regulations creates uncertainty for both users and businesses, particularly in countries like Argentina and Mexico, where restrictions on integrating crypto assets into traditional financial systems are considerable. Additionally, limited access to technology and digital education prevents a substantial portion of the population from benefiting from these solutions.

However, the ongoing advancement of blockchain infrastructure and the growing interest of financial institutions in stablecoins suggest that these obstacles will be overcome. This could signal the beginning of a new era for international payments in Latin America.

Stablecoins are transforming cross-border payments by offering a faster, more cost-effective, and accessible solution. For businesses and individuals in Latin America, they represent an opportunity to overcome the limitations of traditional financial systems and fully participate in the global economy.

As regulations evolve and technology expands, stablecoins could become the standard for international payments, ushering in a new era of digital finance. By adopting this technology, companies can reap the benefits while overcoming the challenges of traditional systems. Implementing stablecoins in your business model is simpler than it seems, with quick integrations via APIs and collaborations with platforms like Bitso Business, facilitating access to these innovative solutions.

This article is based on the report “From Barriers to Bridges: How Blockchain Can Reshape Cross-Border Payments in Latin America.”, recently published in collaboration with PCMI, our commercial partner specializing in market intelligence consulting in the global payments industry.

Explore our full report here and prepare your business to compete in an increasingly digital world.