The traditional financial industry has toyed with many aspects that have stemmed from decentralised finance, but one particular innovation has increasingly garnered attention over the last year.
Stablecoins have surged in usage by some of the globe’s leading financial institutions and payments companies, and Chris Mason, CEO and Founder of Orbital, believes these companies have now moved past “adoption” and are now in the “implementation” phase.
Mason spoke to Payment Expert on the opportunity facing financial institutions to integrate a payment rail that can support stablecoin transactions for cross-border payments, outlining the benefits that can alleviate many of the ongoing friction points traditional cross-border settlements continue to endure today.
Payment Expert: What have been some of the ever-present friction points when it comes to not just settling cross-border payments, but integrating a framework to enable faster transactions?
The two main age-old friction points for cross-border transactions have been speed and cost-effectiveness. Traditional FX transactions, especially for certain currencies, can take two-to-five days to process. Businesses may face fees of up to 7% on FX transactions, not to mention poor exchange rates that chip away at profit margins.
Another overlooked friction point is access to “hard-to-reach” markets, which have historically suffered from high fees, slow settlement times, and limited transparency. Unsurprisingly, this is where stablecoins are already having the biggest impact. Orbital’s Stablecoin Retail Payments Index estimates around 3.5 million consumer-scale payment transactions per month, with adoption particularly strong in emerging markets, a clear signal that stablecoins are already being used to address these pain points today.
Payments in Europe mostly flow through SEPA, which is highly efficient. But when businesses need to move money in-and-out of emerging markets, they often rely on SWIFT, which has multiple intermediaries, high costs, slow settlement, and limited transparency. This unnecessarily complex infrastructure creates significant challenges for corporate treasury teams in reconciliation, counterparty identification, and liquidity management.
Stablecoin payment innovation offers a compelling alternative here, providing faster, more transparent and efficient settlement, which explains why a growing number of businesses are beginning to explore them for cross-border payments.
Payment Expert: Stablecoins are now emerging as a remedy for these cross-border friction points, but how seriously are financial institutions considering adopting a payment rail that supports stablecoins as of today?
Very seriously. Stablecoins are becoming more widely explored and adopted in the finance sector, though naturally, the space will evolve over time, and we’re likely still years away from stablecoins being a mainstream solution.
According to FXC Intelligence’s latest State of Stablecoins in cross-border payments report, the estimated total addressable market is $16.5trn, with stablecoins representing less than 1% of the global cross-border payments market today.
However, in the past few months, we’ve seen major financial organisations, like JP Morgan and Citi, lean into stablecoins. This is undoubtedly tied to recent policy developments, for instance, the Markets in Crypto Assets (MiCA) regulation in Europe and the GENIUS Acts in the US.
Large financial institutions and fintechs, and even social media companies, are now embracing stablecoin-supported payments globally. We’ve actually moved past adoption considerations to implementation. The conversation has shifted from “why stablecoins?” to “how do we integrate them?”.
Payment Expert: Can you outline some use cases from your experience or knowledge of the benefits of settling cross-border transactions with stablecoins?
Take payments into emerging markets as an example. A single transaction can involve up to six counterparties: a correspondent bank, the underlying institution, and multiple receiving banks.
Each one has regulatory obligations, operates in different time zones, and requires full visibility on the transfer. Funds can be delayed for days or even weeks. In sectors like commodities or global supply chains, those delays don’t just slow trade, they also tie up working capital, increase counterparty risk, and force treasurers to hold larger liquidity buffers.
Stablecoins can cut through this complexity. Where both sending and receiving rails support them, what’s often called a “stablecoin sandwich”. A business can, for example, convert euros into USDT in real time, move it across borders near-instantly, and settle back into local currency within minutes.
Of course, this only works if the right infrastructure is in place: on/off ramps, liquidity relationships, issuer connectivity, and a robust localised network to bridge stablecoin and fiat rails. That’s exactly the payment infrastructure we’ve built at Orbital.
Payment Expert: What are some of the boundaries when it comes to integrating a stablecoin payment rail separate from a fiat-backed rail, is it insufficient infrastructure, regulation or other factors?
Integrating stablecoins and fiat-backed rails is both a matter of infrastructure and regulation. Without the right infrastructure, reconciliation, counterparty identification, and liquidity management become major challenges for corporate treasury teams.
An ideal solution would be 24/7 fast and cost-effective payments, built on very specific blockchain technology, with the right technical capabilities existing amongst liquidity providers and stablecoin-friendly banks in all regions, in addition to robust compliance at all points in the chain. It’s not just about faster payments – compliance, security, licensing, and ease of use are also important.
Payment Expert: Is the next step for stablecoin adoption to become widely accepted by financial institutions and merchants before widespread consumer adoption, and how can this be achieved?
Ultimately, exposure to practical stablecoin use cases is what drives wider adoption. Large enterprises, from automotive manufacturers to global retailers, are increasingly exploring stablecoins as a faster, more efficient way to move money across borders. Demonstrating clear value in these real-world applications is key to accelerating both institutional and consumer adoption.
While the financial industry is generally becoming more bullish on the potential of stablecoins, there are readily acknowledged challenges that still need to be addressed. One key area is sufficient liquidity to enable value to be moved on and off-chain at speed in the markets in question. In other words, making sure there is enough demand for stablecoin at the other end for money not only to be on-ramped into the space, but for it to be able to be off-ramped in the desired market too. For every buyer, there needs to be a seller, and vice-versa.
The question then is, if there’s demand from both buyer and seller, how do we scale this further? We’ve seen many companies start to issue their own stablecoins, but issuance alone doesn’t mean that holders can make payments. Many of the current announcements are effectively closed-loop tokens, useful as internal ledgers but not interoperable or reliable for mainstream commerce.
The primary challenge facing stablecoins is the complex infrastructure that surrounds them. We need to start thinking about building stablecoin-enabled infrastructure across the board.
Payment Expert: While USD-backed stablecoins are the overwhelmingly popular option, could we see the birth of GBP, EUR and other currencies attached to stablecoins become more popular once adoption grows and how could this affect cross-border transactions in the future?
While it is true that USD-backed stablecoins are the overwhelmingly popular option, it’s also important to take a step back and see the broader picture. We’re entering into a new era with stablecoin-backed cross-border transactions. It was only recently that the GENIUS Act was signed into law. Stablecoins have now become a mainstream topic in a way they haven’t previously been. And not just in the US, but globally.
The signal is clear: stablecoins are gaining serious momentum in becoming part of global business payment strategies.
Current euro-backed stablecoins like Euro Coin, EUR CoinVertible, and Euro Tether have found limited adoption in regulated DeFi applications and digital euro transactions. Only recently, a group of nine European banks launched a euro-denominated stablecoin designed to compete with the supremacy of dollar-pegged tokens.
I think everyone needs to be clear about the ‘problem solved’ for EUR or GBP-based stablecoins. Both SEPA and Faster Payment work really well today for EUR and GBP payments, respectively. However, USD in a SWIFT world does not work well at all, and given 80% of cross-border trade is done in USD, you can see why USD-pegged stablecoins have become more widely adopted. The problem solved is much greater versus SWIFT.
However, I’m optimistic for the emergence of GBP, EUR and other currencies attached to stablecoins, as there can be ‘hold-ups’ and friction in all traditional payments systems.
Blockchain-based transactions give far better visibility to Financial Institutions, which means that far more sophisticated transaction monitoring rules can be implemented, with the potential to add more information and documentation to the blockchain. This can make blockchain payment systems safer, and allow them to no longer suffer from a lack of visibility in ‘hops’ of transactions between banks. Everyone authorised can be given access to the same information.
My only concern is that compliance teams in banks will need to adjust their thinking and approach with all this additional information. The right interpretation and common standards are going to be key to increasing efficiency through blockchain-based payment systems.
Payment Expert: What would be some advice for a financial company or business mulling over the thought of integrating a stablecoin payment rail?
I’m unable to provide financial or investment advice, and this article shouldn’t be considered as such. Anyone considering financial decisions should carry out their own research and seek guidance from a qualified advisor.
However, if I were a financial business exploring stablecoin payments, my priority would be finding a platform that puts data, compliance and security at the centre. That’s why I’d encourage anyone exploring stablecoin payments to do their own due diligence.
With increasing regulatory clarity, rigorous oversight is becoming a key factor in determining which firms have the proper regulatory approvals and safeguards in place to manage assets and process transactions securely.
Recognising the difference between a licensed and authorised provider and one that is only registered for AML reporting is critical. While more lightly regulated providers may appear more affordable, the broader operational and security risks can be significant.
For businesses evaluating stablecoin payment partners, security, regulatory compliance, and legal safeguards should always take precedence.
