How stablecoins can redefine global remittances infrastructure

Mijail Popov, Senior Analyst and Project Manager at Payments and Commerce Market Intelligence (PCMI), explains the impact of stablecoins on remittances and overall global money movements.

The global remittance market remains one of the most systemically important yet structurally inefficient segments of international finance. According to World Bank estimates, global remittance flows were expected to reach approximately USD 905 billion in 2024, with projections for 2025 suggesting continued resilience despite macroeconomic volatility. This positions remittances as a larger source of external financing for many emerging economies. 

Remittance corridors, such as the US–Mexico, the US–Central America, the Gulf–South Asia, and Europe–Africa, move billions of dollars annually. In countries like Guatemala, remittances represent nearly 20% of GDP, underscoring their socioeconomic importance.

Despite their scale, remittance rails remain mostly anchored in legacy infrastructure: correspondent banking networks, multiple intermediary banks, opaque FX spreads, and multi-day settlement cycles. Even where digital front-ends exist, back-end settlement often relies on SWIFT messaging infrastructure and pre-funded accounts, resulting in structural friction:

• Average global remittance costs remain near 6%.
• Liquidity must be pre-positioned across jurisdictions.
• Settlement is not truly real-time, even when customer-facing interfaces suggest otherwise.

At the same time, the growth of stablecoins has introduced a parallel settlement layer. From 2024 to 2025, total stablecoin supply consistently grew from near USD 150 billion to USD 305 billion, with annual on-chain transaction volumes reaching trillions in USD. Unlike volatile cryptocurrencies, dollar-pegged stablecoins, such as USDT and USDC, function increasingly as digital settlement assets rather than speculative instruments. 

This convergence (a trillion USD remittance market built on legacy rails and a rapidly maturing stablecoin ecosystem offering programmable, near-instant settlement) is setting the stage for a structural transformation.

The question has switched from whether stablecoins are technically viable for remittances to whether they represent a foundational infrastructure shift.

Stablecoin market momentum: from experimentation to strategic adoption

The past two years have marked a clear transition from crypto-native experimentation to institutional adoption, particularly for large players in the remittance ecosystem. 

Western Union, known for traditional remittance infrastructure, has begun testing stablecoin-based settlement systems within its treasury operations. Historically cautious due to volatility concerns and regulatory ambiguity, the company shifted its position following regulatory clarity in the US. Instead of treating stablecoins as speculative assets, Western Union is exploring them as settlement instruments, using blockchain rails to reduce dependence on correspondent banks, accelerate cross-border settlement, and optimise capital efficiency.

Strategically, this is a crucial pivot. Traditional players are overlaying blockchain settlement on fiat rails (not abandoning them) to improve liquidity management and reduce friction, signalling a hybrid future rather than a crypto-only model. 

In Europe, Revolut partnered with Polygon to integrate stablecoin remittances directly into the fintech app. Customers in the UK and the European Economic Area (EEA) can send USDC and USDT using blockchain rails, with no explicit crypto interaction needed. 

The result is significant: blockchain settlement becomes invisible. End users experience faster and potentially cheaper transfers, while backend rails operate on-chain. 

PayPal’s expansion of PYUSD to multiple chains, including Stellar, enables stablecoins for cross-border payments and working capital solutions. PayPal aims to facilitate near-instant access to capital for SMEs facing receivables delays, a strategic move that signals the next stage of this tech’s utility: integration into broader cross-border payments ecosystems, not only remittances. 

Why Latin America’s stablecoin adoption is being driven by necessity

While institutional adoption accelerates in developed markets, Latin America’s stablecoin adoption is less about innovating and more about necessity. 

Here’s why: persistent inflation, currency depreciation, and capital controls have made LATAM’s traditional banking channels historically inefficient for remittance recipients. In response, USD-backed stablecoins have become practical alternatives for savings, commerce, and cross-border transfers. 

Between 2022 and 2025, the region recorded substantial cryptocurrency transaction volumes, with stablecoins representing a significant share. In countries such as Argentina and Bolivia, stablecoins function as de facto digital dollar accounts, and their utility extends beyond remittances to three key areas:

• Households preserve purchasing power in a USD-denominated asset.
• Freelancers and SMEs manage cross-border cash flows without offshore accounts.
• Businesses reduce exposure to local currency volatility.

Brazil has emerged as a testing ground for regulated integration, where stablecoins connect to domestic real-time payment systems like Pix. In such environments, stablecoins operate as settlement layers interoperable with national payment infrastructure, not as parallel currencies. 

The adoption model in LATAM mirrors a global trend, with stablecoins mitigating banking frictions in under-regulated environments now cementing themselves as key for institutional settlement in regulated markets.

The regulatory catalysts of stablecoins and crypto: the GENIUS Act and MiCA

Historically, lack of regulatory clarity has been the primary barrier to institutional adoption of cryptocurrencies and stablecoins. However, two recently established frameworks may clear confusion and ultimately enable greater stablecoin adoption. 

The US GENIUS Act

Enacted as law as of July 2025, the GENIUS Act provides federal-level clarity for stablecoin issuance and oversight. Defining reserve requirements, compliance standards, and supervisory mechanisms, the regulation reduces legal uncertainty for traditional financial institutions. 

For remittance players, this is especially important. Without clear rules governing stablecoin issuance, custody, and redemption, integrating them into treasury operations posed compliance risk. But now, regulatory clarity is transforming stablecoins from reputational risk to regulated instruments. 

MiCA in the EU

Formally adopted by the EU in April 2023 and effective for crypto-asset service providers by December 2024, MiCA (Markets in Crypto-Assets Regulation) establishes comprehensive oversight for crypto-assets, including stablecoins. It introduces licencing requirements, capital safeguards, reserve transparency, and consumer protection measures. 

For banks, MiCA reduces ambiguity regarding custody responsibilities, issuance standards, and cross-border passporting within the EU, among others. For remittances, the impact is indirect but powerful. Once stablecoins operate under clear compliance standards, banks can integrate them into payment flows without violating prudential or anti-money laundering (AML) obligations. 

In practice, the GENIUS Act and MiCA help transform stablecoins from experimental infrastructure to regulated financial instruments, as regulatory clarity legitimises supply,  not creates demand. 

Stablecoins for remittances: from guesswork to money movement enablers

The integration of stablecoin rails by Banco Industrial in Guatemala illustrates a structural turning point in the evolution of remittances. By partnering with blockchain fintech SukuPay and leveraging USDC on Polygon, the bank enables US–Guatemala remittances for a flat fee of just 99 cents, a dramatic cost reduction compared to traditional channels. 

Crucially, the blockchain layer remains largely invisible to the end user. Funds are received through a mobile application using only a phone number, with no requirement for interaction with crypto wallets or blockchain infrastructure, a model showcasing how stablecoin rails can be seamlessly embedded into mainstream banking services. 

In this context, large financial institutions retain significant advantages: established brand trust, deep regulatory relationships, large consumer bases, and existing on- and off-ramp infrastructure. Stablecoins enable them to optimise back-end settlement while preserving the trust and distribution power of front-end platforms. 

We’re already seeing this shift, as exemplified earlier, but here’s a recap:

• Western Union is piloting blockchain-based settlement mechanisms.
• Revolut started embedding stablecoins within its consumer applications.
• PayPal is extending stablecoins into areas such as working capital financing.
• Banco Industria has integrated stablecoin rails directly into mainstream remittance flows.

Traditional banks no longer question whether stablecoins are relevant. The real question is how quickly (and strategically) they choose to integrate them. 

The next innovation stage of the remittance industry will not be defined by crypto replacing banks. Instead, it will centre banks’ ability to leverage stablecoin infrastructure to modernise remittance rails, reduce friction, improve liquidity efficiency, and expand cross-border financial inclusion. 

Ultimately, institutions approaching stablecoins as infrastructure, not ideology, will be best positioned to compete in the next phase of global money movement. 

About the author

Mijail Popov is a Senior Analyst and Project Manager at PCMI, specialising in digital assets such as crypto and blockchain. He oversees market intelligence projects that help global payments companies grow, measure, and protect their businesses. Based on that market intelligence and his payments industry experience, Mijail also provides strategic guidance to financial institutions, card networks, digital wallets, fintechs, payments processors, and other payments players to help them solve key challenges and maximise their opportunities. 

 

About PCMI

PCMI is an advisory group focused on the global payments industry, with over 30 years of experience providing market intelligence to corporations, executing more than 500 client engagements in the payments industry since 1991. PCMI performs custom strategic engagements, including market sizing, opportunity benchmarking, market entry, customer insights, and more, covering over 50 global markets in the Americas, EMEA, and APAC regions. Visit www.paymentscmi.com to learn more.