In August 2025, a strategic partnership was formed between stablecoin market leader Circle and Finastra, which facilitates an estimated $7 trillion in daily bank-to-bank cross-border transactions. The partnership sees Finastra integrate Circle’s USDC into its payment infrastructure, a move that’s meant to help financial institutions bypass the sluggish and expensive banking chain. Supported banks will now have access to near-instant, 24/7 settlement using a regulated digital dollar.
This is just one of the ongoing shifts in the financial market as stablecoins continue to shape a new financial future. Lots of banks and financial institutions have also embraced stablecoins, from Stripe and PayPal to the Australia and New Zealand Banking Group (ANZ) and the National Australia Bank (NAB).
The rise and growth of stablecoins
Stablecoins were created to solve what was one of the biggest problems in crypto: transacting without fear of volatility. This was fuelled by traders who needed a place to park their funds without converting them back to fiat currency, a process that could even take days.
The first stablecoin, Tether’s USDT, solved the issue by creating a token that was pegged 1:1 to the US dollar. Its value would only change based on the value of the USD, which allowed traders to quickly move in and out of volatile assets.
Stablecoins then became the de facto currency for Decentralised Finance (De-Fi), something that has significantly contributed to their popularity.
However, over recent years, stablecoins have grown beyond simply serving as a bridge in crypto activities. Today, they are a key part of the global payment system for goods and services, and they’ve also broken the long-standing friction in cross-border transactions.
When you want to send money to someone in another country using a stablecoin, the transaction is near-instant and very cheap. In fact, there’s no difference between local and international transactions in stablecoin transactions.
Add this to the security and transparency of the blockchain technology, and it explains the stablecoin market growth from just about $28 billion in 2020 to over $300 billion in 2025. In 2024, the annual transfer volume of stablecoins even exceeded the combined yearly volumes of payment giants Visa and Mastercard.
How stablecoins are reshaping cross-border payments
The current global payment structure still relies heavily on the SWIFT messaging network and the system of correspondent banks, something that was built for the 20th century. The system is very secure and reliable, but it’s also quite slow and expensive.
We’ve seen alternative systems from FinTech payment processors like PayPal and Wise, but they are still fragmented.
Stablecoins have come in to disrupt the traditional cross-border ecosystem in multiple ways.
Faster settlement: minutes instead of days
When you make a payment in the traditional system, the payment messages move from the sender bank to the recipient bank through a chain of intermediary banks. And at each step, the payment needs reconciliation and anti-money laundering (AML) checks, all the while being subject to local banking hours.
Stablecoins eliminate all that. Everything is handled on the blockchain, so the system is up 24 hours a day, 7 days a week, 365 days a year. No downtime. The settlement also happens in minutes or even seconds on more efficient blockchains like Solana.
Lower transfer costs by removing intermediary fees
Every correspondent bank in the legacy chain charges a fee, as they must provide liquidity and process your payment. There’s also the factor of foreign exchange (FX) markups, which takes remittance costs to around 6.5% of the amount sent – far above the G20 target of 3%.
Stablecoins take that to near zero, as you only need to pay the blockchain network fee. It’s usually a small amount that can be a few cents or a few dollars at most, depending on network congestion.
Releasing capital tied up in pre-funded accounts
In the traditional payment system, banks have to pre-fund Nostro/Vostro accounts, which are foreign currency accounts held with counterparties globally. These funds are basically idle, and they tie up trillions of dollars without earning interest. They are meant to act as an insurance buffer against settlement risk.
Payment systems that allow banks to transact through stablecoins significantly reduce this buffer, which is a significant change in how banks approach capital management.
Expedition of stablecoin regulatory frameworks
The advantages offered by stablecoins have managed to attract traditional financial institutions, such as JPMorgan Chase, among others. They are now creating their own stablecoins or integrating existing ones into their systems.
Now that stablecoins are mainstream, governments all over the world have been forced to abandon their cautious approach and find a way to regulate stablecoins.
Here in Australia, the ASIC, Treasury and other regulators have been issuing guidance on stablecoins and implementing strict governance policies. The most recent of these was the 29 October release of the updated Information Sheet 225 (INFO 225), which clarified that stablecoins are financial products. They are therefore regulated by the Corporations Act 2001, meaning issuers and intermediaries need an AFS licence. Essentially, they are subject to the same strict policies that govern traditional financial products.
Over in Europe, MiCA’s rules on stablecoins came into effect in June 2024, introducing strict requirements on issuers. So strict that Tether’s USDT, the biggest stablecoin by market capitalisation, had to move out of the market.
The US recently fast-tracked the GENIUS Act 2025, which was signed into law in July 2025 to establish the country’s first comprehensive crypto regulation framework. Other jurisdictions like Hong Kong and Singapore have also passed their own frameworks, and the UK is working on its own.
This shows that stablecoins and crypto in general can no longer be ignored. Countries that foster innovation will also gain significantly from the digital market.
