Why the Global Payments System is on the Verge of Disruption

Cross-border payments are the lifeblood of global commerce, with $156 trillion flowing annually. Yet, the backbone of this system—SWIFT and RTGS networks—is outdated, costly, and slow.

For decades, financial institutions had no alternative to these legacy systems. But today, stablecoins are emerging as a game-changer, offering instant, cost-effective, and transparent settlements. The question is: Will they replace SWIFT, or will traditional systems evolve to survive?

 In this deep dive, we break down:

• The inefficiencies of SWIFT & RTGS systems

• How stablecoins are revolutionizing large-scale transactions

• Cost & speed comparisons with real-world data

• How major institutions like Visa & PayPal are adopting stablecoins

• The regulatory response & the future of institutional finance

Let’s get started. 

The Reality of SWIFT & RTGS: A System Built for a Different Era

Founded in 1973, SWIFT was a revolutionary messaging system at the time. But SWIFT itself doesn’t move money—it merely acts as a relay system between banks. Actual transactions rely on correspondent banks, creating delays, fees, and inefficiencies.

Major Issues with SWIFT & RTGS

Expensive – SWIFT transactions cost $20–$50+ per transfer, with hidden forex markups.
Slow – Payments take 2–5 days due to multiple intermediary banks.
Opaque – No real-time tracking; funds can get stuck in compliance checks.
Restricted – SWIFT operates only during banking hours, limiting real-time transactions.

Why SWIFT’s Model is Outdated in a Digital Economy

• Fragmented Infrastructure: Each financial institution involved in a SWIFT transaction operates on separate systems, creating inefficiencies.

• Cross-Border Complexity: Different jurisdictions impose varying compliance rules, further delaying settlements.

• No True Instant Finality: Unlike blockchain-based transactions, SWIFT payments can still be reversed under specific circumstances.

Stablecoin Settlements: A Faster, Cheaper, and More Transparent Solution

Unlike SWIFT, stablecoins allow direct peer-to-peer transfers on blockchain networks, eliminating middlemen, reducing costs, and enabling instant settlements.

How Stablecoin Settlements Work

✔ Instant Transfers – Funds settle in seconds, not days.
✔ Minimal Fees – Typical costs are under $1, making them 100x cheaper than SWIFT.
✔ 24/7 Availability – Unlike banks, stablecoins are always online, ensuring seamless transactions.
✔ Full Transparency – Payments are trackable on-chain, reducing disputes and fraud risk.
✔ No Middlemen – Eliminates correspondent banks and excessive fees.

Why Stablecoins Solve Key Payment Frictions

• Predictable Costs: No hidden currency conversion markups.

• Borderless Nature: Transactions work the same way across multiple countries without the need for banking partners.

• Trustless Verification: No reliance on centralized entities; transactions are validated by blockchain consensus mechanisms.

Which Stablecoins Are Best for Global Settlements?

Not all stablecoins are created equal. While stablecoins promise instant, borderless payments, their design can make or break their ability to replace SWIFT and RTGS systems for institutional settlements.
Here’s how the major types compare:

Why Fiat-Backed Stablecoins Dominate Settlements
For institutional adoption, fiat-backed stablecoins (like USDC, USDT, PYUSD) are the preferred choice because they offer:

• Regulatory clarity (MiCA in Europe, U.S. stablecoin bills).

• Liquidity & capital efficiency (1:1 backing).

• Integration with existing financial systems (banks, fintechs, payment processors).

Takeaway: For businesses looking to streamline settlements, B2B payments, and cross-border transactions, fiat-backed stablecoins are the most reliable option.

The Role of Stablecoins in Emerging Markets

While stablecoins are disrupting corporate and institutional finance, they are also transforming economies where traditional banking systems are unreliable.

• Remittances Without Borders – Workers sending money home using stablecoins avoid excessive remittance fees (Western Union charges up to 10%, while stablecoins reduce costs to under 1%).

• Financial Inclusion – Countries with unstable currencies (e.g., Argentina, Turkey, Nigeria) are turning to USD-backed stablecoins to hedge against inflation.
  Alternative Store of Value – In regions facing hyperinflation, citizens are using stablecoins as digital savings accounts since local banks are unreliable.

• Case Study: Argentina’s Surge in USDC & USDT Transactions In Argentina, where inflation exceeds 100% annually, over 30% of digital payments are now settled in stablecoins, particularly USDC and USDT, allowing citizens to protect their purchasing power without accessing traditional foreign exchange markets.

Institutional Adoption: The Players Betting on Stablecoins

While critics argue that stablecoins are too volatile or lack regulatory clarity, major institutions are already integrating them into their financial stack.

Case Study: Visa's Integration of Stablecoins Visa has taken a major step in integrating stablecoins into its payment network through the Visa Tokenized Asset Platform (VTAP). This initiative enables banks to manage fiat-backed tokens and stablecoins, streamlining cross-border transactions and reducing settlement times.

Case Study: PayPal's Launch of PYUSD PayPal introduced PYUSD, its own stablecoin, to enhance transaction efficiency and reduce costs, reflecting a growing trend of mainstream adoption of stablecoins in financial services. 

Case Study: HSBC & China’s CIPS System HSBC joined China’s Cross-Border Interbank Payment System (CIPS) in 2024 to reduce reliance on SWIFT. This marks a major shift in banking infrastructure.

Key Takeaway: The largest financial institutions are not waiting—they are already adopting stablecoin-based settlements to stay competitive.

How Banks & Fintechs Are Testing Stablecoins Today

Stablecoins aren’t just for crypto fans anymore. Banks and fintechs are jumping in, moving billions in 2024.

• North America’s Quick Fix: Stablecoins speed up payments—$8 trillion crossed here last year.

• Asia-Pacific’s Money Saver: $150 billion in transfers skip big bank fees with this new way.

• Europe’s Rule-Friendly Shift: $3 billion in deals fit 2024 laws—banks are on board.

Pricey spots like U.S.-Latin America and places with few banks (60% of Africa) are trying stablecoins to dodge SWIFT’s $20–$50 charges. South America’s 30% switch shows it’s catching on.

The Regulatory Response & Future of Payments

With stablecoins gaining traction, regulators are rushing to catch up.

MiCA (Europe) – The Markets in Crypto-Assets Regulation (MiCA) framework legitimizes stablecoin usage, making Europe a key player in global adoption.
U.S. Stablecoin Bills – The Lummis-Gillibrand bill aims to create a clear legal framework for stablecoins, boosting institutional adoption.
Brazil’s Stablecoin Surge – 90% of crypto transactions in Brazil are now stablecoin-based, showing their role in emerging markets.

Prediction:  Over the next 5 years, we will likely see a hybrid system where SWIFT coexists with blockchain-powered settlements, forcing legacy institutions to modernize or lose relevance.

Stablecoins vs. CBDCs: The Battle for Digital Money

While stablecoins are disrupting SWIFT & RTGS systems, central banks are fighting back with CBDCs (Central Bank Digital Currencies).

What’s the Difference?

Why Businesses Prefer Stablecoins Over CBDCs

• Interoperability: Stablecoins work across multiple blockchains. CBDCs are often limited to national banking systems.

• Flexibility: Stablecoins can be held by businesses & individuals globally. Many CBDCs have spending limits or usage restrictions.

• Programmability: While both can be programmed for automation, businesses may prefer stablecoins due to less regulatory oversight.

Takeaway: CBDCs are coming, but they are not a replacement for stablecoins.
For businesses needing fast, borderless payments, stablecoins remain the better choice.

Global Stablecoin Regulations: Where Are We Headed?

Regulators are finally catching up, but stablecoin rules vary across the world.
Here’s a snapshot of major jurisdictions & their stance on stablecoins: Why This Matters:

• Clear regulations (like MiCA in the EU) will boost adoption.

• U.S. regulatory uncertainty slows institutional adoption.

• Businesses should choose stablecoins backed by compliant issuers.

Takeaway: Stablecoin adoption will accelerate as regulations solidify.
Enterprises must prepare for compliance-ready stablecoin solutions.

Conclusion: The Shift Is Happening

Stablecoins aren’t just hype; they’re actively reshaping financial settlements. Banks & fintechs are adopting stablecoins for efficiency. Corporations are exploring them for faster payroll & supplier payments. Regulators are catching up, giving them more legitimacy.

The question is no longer “if” stablecoins will reshape global finance—it’s already happening. Are you ready?

How Our Product is Leading the Change

We’ve built a stablecoin-powered cross-border payments solution designed for businesses, fintechs, and financial institutions looking to move money faster, cheaper, and more efficiently.

• Seamless integrations with banking & fintech platforms

• Multi-currency support

• Regulatory compliance & institutional-grade security

Don’t wait for the future—embrace it today.  Get in touch to revolutionize your payments.