Cross-border payments and remittances

A traditional international transfer usually passes through a chain of correspondent banks, each taking a fee and adding delay, and arrives in one to several business days. Remittances sent by migrant workers through money transfer companies often lose several percent to fees and exchange spreads. With stablecoins, the sender buys digital dollars or euros, sends them across a blockchain in minutes and the recipient cashes out locally or keeps them.

This is one of the clearest real-world uses of crypto. Corridors such as the United States to Mexico, the Philippines or Latin America, business payments to Asian suppliers and payroll for remote workers increasingly use stablecoins, and banks and card networks are building their own settlement on blockchains.

The weak links are at the edges. Converting cash to crypto and back requires local exchanges or agents, which charge fees and may be scarce. Recipients face exchange rate risk if they hold dollar tokens in another currency, and providers must apply anti-money-laundering rules, sanctions screening and, in the EU, the travel rule.