Lucy Ingham, who recently authored a report for FXC Intelligence on the state of stablecoins in cross-border payments begins the discussion by highlighting the significant rise in industry attention, with mentions of stablecoins becoming near ubiquitous in recent earnings calls, a sharp contrast to just a few quarters ago.
Lucy explains that stablecoins offer revenue growth potential and market access, though they aren’t expected to replace current systems entirely. Instead, they act as a toolkit for innovation across the sector.
The FXC Intelligence report is designed as a primer for industry professionals, estimating a $16 trillion baseline opportunity, while emphasising where stablecoins are likely to drive change and where disruption may be limited.
Merchant Demand: payabl.’s Perspective
Kristaps Zips shares how global merchants are increasingly showing interest in stablecoins, particularly those operating in less accessible markets such as Latin America and parts of Africa.
He underscores that transaction speed is a primary benefit, although cost savings can vary by region. Responding to this demand, payabl. has enabled stablecoin acceptance and payouts within their payabl.one platform. This solution shields merchants from volatility, as payabl. handles the conversion and settlement process.
Kristaps also notes real-world adoption examples: Shopify, Twitch, and various travel platforms already support stablecoin payments, showing that this is not just theoretical, it’s happening now.
Marketplace Realities: A Look Inside Wolt
Aleksandr Povarov brings in his perspective from his recent role at Wolt, a delivery marketplace operating in over 30 countries. While stablecoins aren’t widely used for everyday purchases like food deliveries, Aleksandr agrees with Lucy and Kristaps that the interest is growing, particularly in markets with unstable local currencies.
He shares an anecdote from Monaco, where stablecoin payments for street food are already in practice, reflecting how regional differences and consumer behaviour shape adoption patterns.
The Challenges: Liquidity and Infrastructure
Lucy returns to outline the technical and logistical challenges holding back broader stablecoin adoption, particularly liquidity issues. She explains the concept of a “stablecoin sandwich”, where fiat currency is converted to stablecoin for blockchain-based transfer, then back into fiat on the receiving end.
This model requires stablecoin liquidity in the destination market, which is more prevalent for smaller transfers and in regions with existing stablecoin use. Lucy notes that volatile currency environments have led to consumer-level adoption, which then flows upward to business usage.
Aleksandr echoes this, adding that even during his time at Wise, customer interest in crypto alternatives was evident, although regulatory constraints made implementation more complex.
The Shift Toward Instant Payments
Kristaps highlights the global momentum toward instant settlement, with examples from the UK (Faster Payments), the EU (SEPA Instant), and the US (FedNow). In his view, “the future is instant” and stablecoins could accelerate this shift.
Lucy adds that while speed is crucial, instant payments aren’t always ideal, especially for B2B transactions where risk management and reversibility are important. The future may involve hybrid systems combining the strengths of stablecoins with traditional safeguards.
She also notes that the landscape is not about “disruption versus tradition” but rather collaboration and integration, with stablecoins increasingly forming part of a hybrid network.
Navigating a Fragmented Regulatory Landscape
Aleksandr raises an important point: while the industry is pushing for centralised, cross-border solutions, the global trend toward local regulatory control may pose a counterforce. In some regions even within the EU, businesses must adopt local payment methods to stay compliant.
Kristaps supports this with examples of indirect crypto use, such as gift card purchases using stablecoins, highlighting how crypto can permeate commerce even when it’s not directly accepted.
He also underscores a major challenge: finality of transactions. With instant crypto payments, there’s no option to reverse, making fraud prevention more complex.
Winners, Losers, and the Role of the US Dollar
Lucy discusses the broader implications of stablecoins for the financial system. While traditional players with strong local integrations may benefit, others especially those in card payments, could face existential threats due to reduced fees and disintermediation.
She also raises a geopolitical concern: over 90% of stablecoins are USD-denominated, posing challenges to European monetary sovereignty. Unless euro stablecoins scale up, this imbalance could persist, influencing how and where stablecoins are adopted.
Aleksandr agrees that the future likely involves evolution, not revolution. Slower, more expensive payment methods may fade, while efficient, user-friendly systems will rise.
Kristaps adds that lowering conversion costs between fiat and stablecoins would significantly support this evolution.
Will Stablecoins Go Mainstream?
The panel turns to the topic of broader crypto adoption. Kristaps points out that while adoption is still niche, certain industries already see up to 20% acceptance rates. Regulation is key: with better frameworks in the US and UK, trust is growing, and adoption is likely to follow.
Lucy anticipates growth driven by consumer demand, though much of the innovation may remain “under the hood,” meaning users won’t always know they’re using stablecoins.
Aleksandr confirms that merchant interest will rise as customer demand increases, particularly as trust in crypto grows and regulations mature.
The Regulatory Turning Point
Lucy highlights the Genius Act, recently passed in the US, as a major milestone. For the first time, it provides a clear regulatory framework for stablecoins, giving institutions like Bank of America the confidence to explore stablecoin strategies. This marks a dramatic shift in institutional engagement with digital assets.
Looking Ahead: Predictions for the Next Two Years
As the episode wraps, Russell asks the guests to look ahead.
- Aleksandr believes that within two years, marketplaces will have implemented stablecoin capabilities, responding to consumer expectations.
- Kristaps expects mainstream adoption to continue, with stablecoins potentially enabling peer-to-peer payment models and becoming a standard part of PSP offerings.
- Lucy forecasts that while stablecoins may still account for less than 50% of total payment volumes, their use will have grown significantly, particularly behind the scenes, shaping infrastructure more than user interfaces.
