For those who leave their homelands to earn a living elsewhere, cross-border transactions are a necessity, and remittances are the economic
lifeline for billions of people. Yet, despite their enormous volume, these transactions remain interlocked with a financial system that inhibits the commercial activity of precisely those who can least afford it. Legacy networks impose additional fees and
extensive bureaucracy, which can result in huge processing times.
The World Bank has highlighted the global average remittance fee at a staggering 6.6%. This amounts to a tax on the world’s most vulnerable
that siphons away billions in transaction expenses. Beyond the sheer expense, there is the matter of speed, or lack thereof. Transfers can take days to be processed by correspondent banks and money transfer operators. For families dependent on these funds
for survival can go beyond simple inconveniences.
A stagnating establishment model
Moreover, there is the reality of financial exclusion. Entire swathes of the global population remain unbanked and left out of a system that
should, in principle, serve them. Emerging nations where economic volatility is significant and banking penetration is low are most impacted by the structural inequity. However, stablecoins are set to shake up this arrangement. This new form of currency is
a type of cryptocurrency that is pegged to a stable asset, such as the US dollar, to minimise price volatility and provide a reliable medium of exchange.
With stablecoins, the ability to send money internationally is less reliant on legacy banking systems, which are plagued with inefficiencies.
Operating on blockchain infrastructure, they can bypass the observable restraints that have been associated with conventional financial transfer systems.
Regarding the question of transfer speed, stablecoin transactions settle in minutes rather than days. This cuts out delays imposed by typical
banking hours and intermediary processing times. As a result, families can receive funds and access them on a near-instant basis. This has already been proved by some established banking networks testing out the new currency.
A demonstration between
South Korea’s Shinhan Bank and South Africa’s Standard Bank, for instance, showed a cross-border stablecoin transfer that settled in around 25 seconds.
Aside from how the technological infrastructure facilitates quick transfers, the costs are much lower. Unlike traditional remittance providers,
which are anywhere from 5% to 10%, stablecoin transactions cost just a fraction of a percent. By eliminating middlemen, these transfers allow workers to retain more of what they earn.
Greater accessibility
There is also a shake-up in the material requirements for transferring abroad. With stablecoins, a smartphone is the sole tool to send and
receive money. This is especially transformative for those in regions where banking infrastructure is lacking. The result is an expansion of financial participation without a formal bank account.
One of the biggest differences between traditional banking and stablecoins is time. Banks operate on rigid schedules. They often close on
weekends and observe holidays. Likewise, they limit access based on time zones. Stablecoin networks, on the other hand, run 24/7. This means users can send and receive money anytime, anywhere, without being subject to banking hours.
A financial sector shift
Aside from accessibility, stablecoins also offer something that traditional financial systems struggle with, which is transparency. Because
they operate on public blockchains, every transaction is recorded and verifiable. Issuers like Paxos
regularly publish reports
detailing their reserves, showing exactly how their stablecoins are backed. This level of openness helps reduce fraud and builds trust between senders and recipients.
For people living in countries where inflation and currency instability are a common concern, stablecoins provide a crucial financial lifeline.
By being pegged to the US dollar or other strong fiat currencies, they offer protection against devaluation, ensuring that migrant workers’ hard-earned money holds its value when sent home. Once a recipient has a digital wallet, they can access financial services
like lending, savings, and investment tools, helping them build long-term stability.
Stablecoins also introduce a new level of automation to money transfers. Unlike traditional cash, they can be programmed to execute transactions
under specific conditions. These factors include automatic bill payments, escrow services or scheduled disbursements. This makes remittances more efficient while addressing fraud and administrative overhead.
Innovation to Inclusion: The true value of stablecoins
Without a doubt, stablecoins are the future of finance, a major part of a broader movement to decentralise finance and rewire how money moves
around the world. They bring blockchain into everyday transactions—bridging gaps that traditional systems have long failed to close.
Yes, challenges remain: regulatory clarity, anti-money laundering safeguards, and more intuitive user experiences are essential. But with
the right frameworks in place, stablecoins could do more than just modernise payments—they could finally make financial inclusion more than a promise. They could make it real.
