Cross-border payments

In the traditional model, SWIFT does not move money: it is a messaging network (MT messages and now ISO 20022) that instructs banks. Actual settlement happens through nostro and vostro accounts chained across correspondent banks. Each hop adds fees, FX spread and latency, with typical windows of one to five business days and little transparency for the end client. With a stablecoin, value moves directly on-chain between wallets, settlement is near-atomic and instant, and FX is resolved at the on-ramp and off-ramp. Key parameters are settlement finality, cost per transaction, operating window (24/7 versus banking hours), fee transparency and compliance with the Travel Rule and sanctions.

This is the market stablecoins contest. The BIS itself documents that only 35% of retail cross-border payments arrive within an hour, against the G20 target of 75% by 2027. The migration to ISO 20022 (with coexistence through November 2025) and the G20 roadmap aim to modernize the model. Domestic instant-payment systems like Pix, UPI and FedNow already work at scale, but lack cross-border interoperability, which is precisely the gap on-chain rails fill.

SWIFT and correspondent banking are the incumbent stablecoins challenge. Circle Payments Network and USDC offer regulated stablecoin cross-border infrastructure. Among established players, JPMorgan runs Kinexys (formerly Onyx) with its payment token, and PayPal issues PYUSD through Paxos, a sign that both fintech and banking are entering with their own payment tokens.