A new report highlights how stablecoins are poised to revolutionize global cross-border payments, drastically cutting both transaction times and costs, with major financial institutions already adopting the underlying blockchain technology.
The accounting firm KPMG indicates that settlement times, which currently span several days, could be reduced to mere seconds or minutes using stablecoin-based solutions. Transaction costs, on average, could fall by more than 99% compared to traditional banking methods.
This marks a significant departure from the current international banking system, which processes an estimated USD $150 trillion annually. That system relies on a complex network of correspondent banks, taking between two and five days for transactions to complete at an average cost of USD $25 to USD $35.
KPMG notes that the traditional infrastructure also compels financial institutions to tie up substantial capital in global accounts to ensure liquidity. This model proves costly and inefficient, particularly for banks operating internationally.
Stablecoins are cryptocurrencies whose value is pegged to a stable asset, such as the U.S. dollar or gold. They offer an effective solution to reduce friction and unlock this trapped capital.
These digital currencies are crucial within crypto markets, providing payment infrastructure. They are increasingly becoming a swift and economical tool for international fund transfers. Tether (USDT) and Circle (USDC) represent two of the largest stablecoins by market capitalization and global usage.
The report details how blockchain-based solutions eliminate intermediaries and reduce the need for pre-funding. This alleviates capital pressure, improves liquidity, and frees up resources that are currently idle.
Furthermore, stablecoin transactions offer real-time traceability, enhancing transparency. This capability can meet evolving regulatory expectations, replacing the opacity of older systems with verifiable audit trails on a blockchain.
Major global financial institutions have already begun utilizing blockchain technology for moving actual value. JPMorgan, for example, processes approximately USD $2 billion daily through its internal blockchain platform.
PayPal launched its own stablecoin, PYUSD, in 2023. This stablecoin has since achieved a market capitalization of USD $1.17 billion. This move signals strong endorsement from a mass-market company for digital asset adoption in payments.
KPMG views these developments as confirmation of a growing market demand for stablecoin-based payment models. The firm suggests this indicates the beginning of a structural shift towards a more agile and profitable global financial infrastructure.
The report concludes that stablecoins represent not just innovation, but a competitive advantage for early adopters. In a world where speed and efficiency are paramount, blockchain technology offers near-instant operations instead of multi-day transaction waits.