In the field of cryptocurrency, some believe that code and technology can solve all problems. However, in the foreign exchange realm, this idea is too naive. This article originates from a piece by Sidhartha Shukla and has been organized, translated, and written by Foresight News. (Background: China's "stablecoin ban" orders the public not to discuss: choking the ghost of the dollar, quietly creating the RMB ark in Hong Kong) (Background supplement: 2024-2025 Cryptocurrency Industry Salary Report: Stablecoin salaries grow 3 times, WFH is mainstream) Key points of this article According to data from Visa and Allium, by 2025, the trading volume of stablecoins has reached $5 trillion, involving 1 billion payments. When using stablecoins to exchange different fiat currencies, costs similar to conventional exchanges arise, including bid-ask spreads, exchange fees, intermediary costs, and slippage. Mike Robertson, CEO of foreign exchange infrastructure company AbbeyCross, noted the limitations of stablecoins as emerging payment tools, stating: "In the cryptocurrency field, some believe code and technology can solve all problems. But in the foreign exchange realm, this idea is too naive." Although stablecoins have reached the peak expected by the public, seasoned individuals in the fintech field still believe that these tokens have limitations as emerging payment tools. According to data from Visa and Allium, by 2025, the total trading volume of stablecoins has reached $5 trillion, involving 1 billion payments, not far from the total of $5.7 trillion for the whole year of 2024. Since Donald Trump was elected president of the United States in November 2024, the total market value of these cryptocurrencies, aimed at closely tracking the prices of mature currencies like the dollar, has grown by 47% to $255 billion. The prospects for stablecoins promise a future of faster, lower-cost, and more efficient payments, especially in cross-border transactions. From the data, this potential is gradually being realized, but doubts remain about whether this technology can solve long-standing problems that have plagued the foreign exchange business for decades. When using stablecoins to exchange different fiat currencies (for example, Euro to Hong Kong Dollar), many of the same costs as conventional exchanges arise. "In the cryptocurrency field, some feel that code and technology can solve all problems. But in the foreign exchange realm, this idea is too naive," said Mike Robertson, CEO of AbbeyCross. "Each currency has its unique dynamics, and most banks and payment institutions derive profits from foreign exchange transactions, not from fees." The trading volume of stablecoins is expected to double compared to last year. Source: Visa, Allium. Note: Data for 2025 as of July Foreign exchange costs typically include bid-ask spreads, exchange fees, intermediary fees, and slippage. These costs also exist in cross-border cryptocurrency transactions, and may be particularly prominent in the funding inflow and outflow stages, posing a challenge to the "low-cost" claim made by stablecoin advocates. The growth in stablecoin payment volume is mainly attributed to two application scenarios: one is simplifying cross-border transactions that traditional financial institutions inadequately cover, and the other is payment businesses in emerging markets. Startups focusing on stablecoin payment infrastructure, such as BVNK, are not particularly concerned with payment channels related to the British Pound and US Dollar. According to Sagar Sarbhai, Managing Director for Asia Pacific at BVNK, the company has instead focused on "alternative" payment channels, such as payment routes from Sri Lanka to Cambodia. "These routes typically require multiple intermediaries, which not only incur high costs but are also slow. Stablecoins simplify this process. Although current costs may not be low, the speed is faster, and the efficiency of fund usage is higher," he said. Currently, BVNK's annual transaction volume is about $15 billion. Other startups focused on helping businesses engage in stablecoin operations include more than just BVNK. After experiencing a winter in the cryptocurrency industry in 2022, Conduit transformed into the stablecoin payment space. This startup began utilizing stablecoins to allow users to remit through local systems like Brazil's Pix and receive payments via SEPA (the Single Euro Payments Area, a standardized payment system covering the EU and parts of Europe). According to CEO Kirill Gertman, the company's current annual processing scale has reached $10 billion. Singapore-based Thunes and Canada's Aquanow are also attempting to collaborate with stablecoin issuers and enterprises to simplify payment processes. "The rise of stablecoins is a business opportunity," said Floris de Kort, CEO of Thunes, which raised $150 million in funding this April. "The infrastructure may change, but people will always need to complete 'last mile' payment deliveries using local currencies and wallets." Venture capitalists are reigniting their interest in stablecoins. Source: CB Insights. Note: Data for 2025 as of July 23 Compared to the scale of mature payment operators, the aforementioned data may seem insignificant. According to Visa's latest annual report, Visa alone processed $13.2 trillion in payments in 2024, more than twice the total trading volume of stablecoins in the same period. However, the rapid growth of the market has made payment giants highly alert. They are exploring the so-called "stablecoin layering" model: introducing stablecoins between two fiat currencies to bypass traditional banking networks like the Society for Worldwide Interbank Financial Telecommunication (SWIFT) for transaction settlements within minutes, focusing on markets with US dollar liquidity shortages and inefficient traditional systems. In October 2024, Visa launched a platform allowing banks to mint, burn, and transfer tokens backed by fiat currencies, including tokenized deposits and stablecoins. Recent US legislation (the GENIUS Act) has brought a clear regulatory framework to the world's largest stablecoin market, enabling banks and payment institutions to enter the field with more confidence. This has triggered a rush of global regulators to formulate similar regulatory rules for stablecoin issuers. "We are just beginning to see signs of exponential growth," said Sarbhai of BVNK. "The foundation laid in the past five years may lead to an explosion in the next 12 months." Related reports USDT, USDC in Hong Kong without worries? Lawyer Wu Wenqian clarifies the four major misunderstandings of the Hong Kong stablecoin bill Who can become the technical base for China's stablecoin? Four "national-level" public chains compete on the same stage Are stablecoins just "digital transit cards"? A cognitive battle that could stifle Taiwan's cryptocurrency future "When technology meets foreign exchange barriers: Why is the growth of stablecoins difficult to break the 'traditional dilemma'?" This article was first published in BlockTempo (the most influential blockchain news media).