Original author: Sidhartha Shukla, Bloomberg
Original article translated by: Saoirse, Foresight News
Key points of this article
According to data from Visa and Allium, by the current date in 2025, stablecoin trading volume has reached $5 trillion, involving 1 billion payments.
Exchanging stablecoins for different fiat currencies incurs costs similar to conventional exchanges, including bid-ask spreads, exchange fees, intermediary fees, and slippage.
When discussing the limitations of stablecoins as emerging payment tools, Mike Robertson, CEO of foreign exchange infrastructure company AbbeyCross, stated, "In the cryptocurrency field, some believe that code and technology can solve all problems. But in the foreign exchange field, this idea is too naive."
Although stablecoins have entered what people expect to be a peak period, seasoned professionals in the fintech sector still believe that as emerging payment tools, these tokens have limitations.
According to data from Visa and Allium, by the current date in 2025, the total volume of stablecoin transactions has reached $5 trillion, involving 1 billion payments, which is not far from the total of $5.7 trillion for the entire year of 2024. Since Donald Trump was elected president of the United States in November 2024, the total market value of cryptocurrencies aimed at tracking the prices of mature currencies such as the dollar has increased by 47%, reaching $25.5 billion.
The prospects for stablecoins are bringing a faster, lower-cost, and more efficient future to the payment sector, especially in cross-border payments. From the data, this potential is gradually being realized, but there are still doubts about whether this technology can solve the long-standing problems that have plagued the foreign exchange business for decades.
When exchanging stablecoins for different fiat currencies (for example, euros for Hong Kong dollars), many of the same costs as conventional exchanges are incurred.
In the cryptocurrency space, some believe that code and technology can solve all problems. But applied to the foreign exchange field, this idea is too naive, said Mike Robertson, CEO of foreign exchange infrastructure company AbbeyCross. Every currency has its unique dynamics. Moreover, most banks and payment institutions derive their profits from foreign exchange trading, not transaction fees.
Stablecoin trading volume 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 flow of funds, challenging the 'low-cost' claims made by stablecoin advocates.
The growth of stablecoin payment volume is mainly attributed to two major application scenarios: first, simplifying cross-border transactions that are insufficiently covered by traditional financial institutions; second, payment services in emerging markets.
Startup BVNK, which focuses on stablecoin payment infrastructure, is less concerned with payment channels related to the British pound and the US dollar. According to Sagar Sarbhai, BVNK's Managing Director for Asia-Pacific, the company has shifted focus to 'alternative' payment channels, such as payment routes from Sri Lanka to Cambodia.
"Such routes typically require multiple intermediaries, which not only raises costs but also slows down processes. Stablecoins simplify this process. Although current costs may not be low, the speed is faster, and the efficiency of fund utilization is higher," he said. Currently, BVNK's annual transaction volume is about $15 billion.
Moreover, BVNK is not the only startup focused on helping businesses engage in stablecoin operations.
After experiencing a winter in the cryptocurrency industry in 2022, Conduit transformed to enter the stablecoin payment sector. This startup began utilizing stablecoins to enable users to remit through local systems such as Brazil's Pix and receive payments via SEPA (the Single Euro Payments Area, a standardized payment system covering the EU and some European countries). According to CEO Kirill Gertman, the company's annual processing scale currently reaches $10 billion.
Singapore-based Thunes and Canada's Aquanow are also trying to collaborate with stablecoin issuers and businesses to simplify payment processes.
"The rise of stablecoins is a business opportunity," said Floris de Kort, CEO of Thunes, which raised $150 million in April this year. "The infrastructure may change, but people will always need to complete 'last mile' payment delivery with local currency and wallets."
Venture investors are rekindling their interest in stablecoins.
Source: CB Insights
Note: Data for 2025 as of July 23
Compared to the scale of established payment operators, the aforementioned data may seem insignificant. According to Visa's latest annual report, Visa alone processed $132 trillion in payments in 2024, more than double the total volume of stablecoin transactions during the same period.
However, the rapid growth of the market has made payment giants highly alert. They are exploring the so-called 'stablecoin layer' model: introducing stablecoins between two fiat currencies to bypass traditional banking networks such as SWIFT for transaction settlements within minutes, focusing on markets with dollar liquidity shortages and inefficient traditional systems.
In October 2024, Visa launched a platform that allows banks to mint, burn, and transfer tokens backed by fiat currencies, including tokenized deposits and stablecoins.
The recently passed (GENIUS Act) in the United States has provided a clear regulatory framework for the world's largest stablecoin market, allowing banks and payment institutions to enter the field with more confidence. This has triggered a global race among 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."