The expanding landscape of cross-border payments (Part 2)
In Part 1, we examined how cross-border payments are rapidly expanding with B2B transactions projected to reach $43 trillion by 2025 and $56 trillion by 2030, fuelled by digital trade and the rise of B2B eCommerce. Traditional payment processors such as Stripe and PayPal remain key players but stablecoins are emerging as a powerful alternative. With retail giants such as Amazon and Walmart exploring their own USD-backed stablecoins, will we therefore see these forms of digital money become a real alternative for cross border payments? After all, as stablecoins become core infrastructure, they challenge legacy networks, reshape global financial flows and may even serve US policy interests by boosting demand for the dollar. The future of cross-border payments is no longer about speed and cost alone, it is about control, programmability and economic influence.
Blockchain technology's impact on cross-border payments
Source: TeamBlockchain
Blockchain technology is essentially revolutionising cross-border payments by addressing long-standing challenges such as high fees, slow processing times and lack of transparency. Companies such as Ripple, Circle and solutions built on the Stellar Network (including MoneyGram, Access and FinClusive) are developing blockchain-based products that prioritise speed, security and accessibility with these innovations aiming to create customer-centric payment solutions that are cost-efficient, fast and reliable across borders. Key attributes of effective blockchain-based payments include fraud-resistant security, near-instant processing, high reliability and clear fee transparency. However, a successful blockchain payment product must also deliver intuitive user experiences, strong customer support and seamless integration with existing financial systems. Japan’s Project Pax exemplifies how blockchain and stablecoins are being combined with traditional financial infrastructure. Backed by MUFG, SMBC and Mizuho, the initiative integrates Swift messaging with Progmat's stablecoin-based system, allowing banks to offer faster, 24/7 cross-border payments whilst shielding customers from the complexity of wallets and keys. In addition, Progmat’s use of Datachain’s interoperability tools connects private blockchains (e.g. Corda) to public chains such as Ethereum and Polygon, paving the way for cross-chain stablecoin payments. The initiative aims to meet the G20’s goals for faster, cheaper and more transparent international payments whilst ensuring compliance with AML and other regulatory standards through the use of trust-based, asset-backed stablecoins.
Meanwhile, with the global stablecoin market now exceeding $170 billion, these digital assets (once primarily used for crypto trading) are gaining traction in peer-to-peer and institutional payments, signalling their growing role in mainstream finance - JP Morgan and DBS are advancing institutional payments through Partior, and the Bank of International Settlement is exploring wholesale CBDCs via Project Agorá. These efforts highlight blockchain’s growing role in creating an efficient, inclusive and transparent cross-border payment ecosystem that aligns with global goals for financial modernisation. Essentially, the global enthusiasm for creating a single unified payments system based on traditional and established Western infrastructure has eroded. This shift can be attributed to, or at least accelerated by, the G10 banks revoking Russia’s access to SWIFT on 31 May 2022 in response to Russia’s invasion of Ukraine. This action created considerable concerns within non-Western political and banking communities as it highlighted the limitations and risks of critical trading infrastructure being controlled by a select few. The concentration of power in entities such as SWIFT, DTCC, CREST and Euroclear has prompted a re-evaluation of the global financial system's resilience and inclusivity. As a result, there is a rising interest in decentralisation with countries exploring alternative systems to reduce dependency on Western-controlled infrastructures. China is accelerating efforts to internationalise the yuan amid disruptions in global trade and rising US tariffs - cross-border yuan payments hit a record in March 2025 and China UnionPay expanded its payment network in Vietnam and Cambodia with QR-code payment systems.
Top ten cross border payment networks
Source: TeamBlockchain (FinTechMagazine)
In addition, global payment networks are undergoing rapid transformation to meet the growing demand for faster and more cost-effective cross-border transactions. From central banks to regional systems, the shift away from traditional correspondent banking towards real-time settlement is reshaping the global financial landscape. Financial institutions are prioritising speed, transparency and efficiency, particularly as emerging markets push for greater inclusion in the international payments ecosystem. As the pressure to modernise intensifies, different networks are setting the pace in an aim to dominate cross-border innovation. Stablecoins (digital assets typically pegged to fiat currencies) are emerging as a powerful alternative to traditional cross-border payment systems. Their growing use reflects clear advantages in terms of speed, cost, transparency, accessibility and the fact that they offer programmability. With settlement in minutes, lower transaction fees and blockchain-powered traceability, stablecoins present compelling opportunities to improve the efficiency of global money movement. Stablecoins have become a real alternative way to execute cross boarder payments with $94.2 billion in payments carried out between January 2023 and February 2025 (mainly on a business to business basis), thus highlighting their increasing relevance beyond niche applications. However, regulatory uncertainty has been a major barrier to widespread institutional adoption; banks and financial institutions remain cautious, awaiting legal clarity on how stablecoins will be treated under national and international frameworks. This is expected to change significantly in 2025, with jurisdictions such as the EU, UK and parts of Asia advancing legislation to define stablecoin standards, compliance requirements and oversight structures.
However, it is in the US where we are seeing most changes - potentially, with the GENIUS Act/Stablecoin Bill being passed in the US Senate. US$ denominated stablecoins are redefining how money moves in the digital age, offering new efficiencies in payments, settlements and financial inclusion whilst, in effect, ‘dollarising’ much of the world. Yet, this innovation revives historical concerns from the 19th-century wildcat banking era - particularly regarding monetary fragmentation and stability. Stablecoins today vary in structure, regulation and transparency whereby echoing the diverse and often unstable currencies of pre-Fed America. To preserve the US$’s role as a reliable medium of exchange, history teaches the need for consistent standards, strong oversight and clear regulatory frameworks. And with market projections showing stablecoins potentially scaling to trillions, their impact on the monetary system is accelerating. Whilst the EU is pursuing tight control via regulation and a digital € by looking to introduce a Euro, the US is taking a more open approach promoting an ecosystem of private, blocking a retail CBDC. Instead, the GENIUS Act the private sector to innovate without stifling innovation. While this more entrepreneurial US approach sounds appealing to some there are grave concerns that the GENIUS act could create potential systemic risks for the USA financial markets. By allowing Big Tech and commercial firms to own nonbank stablecoin issuers, it could blur the line between banking and commerce a principle long upheld to protect financial stability. The fear is that stablecoins could evolve into “shadow deposits,” bypassing traditional regulatory safeguards, and fuel a “Subprime 2.0” scenario. Here, crypto derivatives—leveraged bets on volatile assets—could form a precarious pyramid of speculation, echoing the toxic instruments that triggered the 2008 financial crisis. If this crypto-fuelled bubble bursts, the resulting contagion could spill over into mainstream markets, threatening not just crypto investors but the broader economy. A scramble to stabilize markets could even strain U.S. Treasury funding capacity, potentially triggering a sovereign debt crisis.
So, as regulatory clarity improves, institutions are likely to adopt stablecoins more confidently, therefore unlocking liquidity previously trapped in nostro/vostro accounts and reducing operational costs. This regulatory shift is expected to fuel a broader transformation of cross-border payments, creating new opportunities and competitive pressure for both banks and FinTechs. The landscape of cross-border payments is undergoing significant transformation, driven by technological advancements, evolving business needs and geopolitical developments and the move towards decentralisation, spurred by events such as the revocation of Russia's access to SWIFT, underscores the need for a more inclusive and resilient global financial system. Hence, as stablecoins and blockchain technology become more integrated into financial systems, businesses and financial institutions must stay informed and adaptable to leverage these innovations effectively.