Stablecoins are a red-hot topic right now and becoming a key part of the conversation when it comes to cross-border payments. They offer merchants greater speed, cost savings, and certainty – but barriers to mainstream adoption remain. Regulatory developments and closer collaboration should help to overcome them.
Stablecoins, which are cryptocurrencies tied to the value of fiat currencies, are starting to strengthen their grip on the global payments ecosystem.
One industry study suggests that by 2028, savings gained through using stablecoins will reach $26 billion globally; increasing 73% from $15 billion in 2025. This is expected to be driven by adoption in cross-border payments and by eliminating intermediaries through the use of blockchain systems rather than traditional banking rails.
Stablecoins may promise to unlock new efficiencies and lower transaction costs for businesses operating across borders, but alongside the benefits there are still challenges to overcome, including complexity and liquidity.
So what are the opportunities for the world’s merchants, and the regulatory changes driving adoption? And how will this emerging technology sit alongside existing cross-border solutions?
Tracking stablecoins’ growing footprint
“Within the cross-border payments space, the amount of discussions about stablecoins has shot up over the last few months,” said Lucy Ingham, VP of Content & Editor-in-Chief at FXC Intelligence, who recently authored a report designed as a primer for industry professionals, estimating a $16 trillion baseline opportunity.
“We’ve seen an enormous increase in the number of mentions in press releases, and in the most recent round of earnings calls, almost every company in the space mentioned stablecoins at least once, whereas previously it was only a couple of companies.”
Stablecoins offer new opportunities for revenue growth and increased market access, and Ingham expects them to complement, rather than replace, current systems. “The biggest thing to understand is that it’s an emerging markets opportunity,” she added. “Stablecoins don’t necessarily provide a unilateral step change for the industry, but they do provide the prospect of significant revenue improvements and so people are getting quite excited.”
Global merchants are certainly showing increased interest in stablecoins, particularly those operating in less accessible markets with more volatile currencies.
“There are markets that are easily accessible with classic fiat rails, and then there are those that are not, such as Latin America and areas of Africa, and these markets are where much of the opportunity lies,” explained Kristap Zips, UK CEO at payabl., which has responded to growing merchant demand by enabling stablecoin acceptance and payouts within its platform. “In markets where the local currency is particularly volatile, we’re seeing a range of emerging use cases, such as people transferring their salary to stablecoin to avoid losing value overnight.”
Aleksandr Povarov, a fintech payments product lead who has held senior positions at Wise and most recently Wolt, also highlighted how regional differences and consumer behaviour are shaping adoption patterns. “I’ve recently returned from Monaco and there you can now buy a burger on the street using stablecoins,” he said. “It’s quite popular there and shows how the mentality of certain markets has an impact on uptake.”
Stablecoins should also be considered in the context of the G20 Roadmap for Enhancing Cross-Border Payments, which by 2027 aims to ensure 75% of cross-border transactions are credited within one hour of payment initiation.
“Obviously stablecoins can bring many benefits, but speed of settlement is the one I’d highlight the most,” said Zips. “Whether you look at the UK with Faster Payments, the European Union (EU) with SEPA, or the US with FedNow, the future is instant. And this is why a lot of the big platforms, such as Shopify and Twitch, are now also accepting stablecoins as a payment method.”
Facing up to the stablecoin challenges
Despite their growing popularity, there are still some barriers to be overcome when it comes to wider stablecoin adoption. This includes technical and logistical challenges, particularly liquidity issues as highlighted by the concept of the so-called ‘stablecoin sandwich’.
“When you’re paying in fiat, it gets converted into stablecoins to move across blockchain rails and then on the other side it needs to get off ramped into fiat again,” explained Ingham. “You need to have demand for that stablecoin in the local currency you’re off ramping for that to actually work.”
Conversion costs present another challenge. “Pricing is probably the biggest downside at the moment, because you need to pay fees to get your fiat into stablecoin and then back again,” said Zips. “But we’re seeing that pricing for on and off ramps is generally becoming lower as competition increases, and if it becomes cheaper and more widely available, then we will see further growth.”
Then there are the broader implications of stablecoins for the incumbent financial system. While traditional industry players with robust local integrations will benefit, others – and especially those too focused on card payments – could face existential threats as a result of reduced interchange fees and disintermediation.
“The other really interesting thing is that probably more than 90% of the market is now US dollar-denominated stablecoins,” said Ingham. “That means if you’re using stablecoins you’re using the US dollar – and in the EU in particular there are concerns about what this means for monetary sovereignty. How that’s resolved remains to be seen.”
There are ongoing efforts to develop euro-denominated stablecoins. For example, Dutch ING and Italy’s UniCredit are among a group of banks working together to develop a stablecoin that complies with the EU’s Markets in Crypto-Assets (MiCA) legislation. If such efforts successfully scale, they can help address the current imbalance.
Plotting a clearer path forward
Regulatory developments will now be crucial; from how MiCA can accommodate euro-denominated stablecoins through to how emerging frameworks in other regions can further foster consumer confidence and trust.
Povarov echoed this sentiment, saying that even during his time at Wise, consumer interest in crypto alternatives was evident but regulatory constraints made implementation more complex. “We had a lot of customers reaching out and expressing an interest in using cryptocurrencies,” he said. “But as Wise is a fintech, it’s of course rightly tied into compliance and regulations and so developments need to be aligned to the risks posed.”
The GENIUS Act, recently passed in the US, marks a major milestone and provides a blueprint for others to follow. “It provides a clear regulatory framework for stablecoins, giving institutions like Bank of America the confidence to explore stablecoin strategies,” said Ingham. “This has really given traditional parts of the industry the confidence to start thinking about stablecoins in a way they hadn’t before.”
Developments in other markets aren’t quite as smooth. In the UK, for example, the Bank of England has faced a fierce industry backlash over its proposals to impose strict ownership limits on stablecoins. Critics argue the move would damage the UK’s competitiveness as a financial hub and put it at a disadvantage to both the EU and the US.
Once the regulatory foundations are in place, the future is likely to involve hybrid systems that combine the strengths of stablecoins with traditional safeguards.
“I really don’t think this will be a case of stablecoin disruptors versus the rest of the industry,” said Ingham. “There’s a huge amount of collaboration in the space with people integrating each other’s solutions into a sort of hybrid network solution.”
“Traditional payment methods aren’t going to disappear,” added Povarov. “We’ll just see a different balance, where the payment methods that are faster and more convenient for consumers will become preferred options for merchants. I don’t think it’s a case of revolution, but rather an evolution to something a little better for all players in the payments ecosystem.”
Check out our recent Pay it forward podcast episode to find out more about the emergence of stablecoins.