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Global commerce is expanding rapidly while the traditional payment systems remain outdated, expensive, and slow. Both companies and individuals struggle with high transaction fees and long settlements, and some even have very limited access to the banking systems.
People and businesses have been relying on outdated and inefficient systems for transferring money across borders for decades before the emergence of cryptocurrencies, specifically stablecoins. The main problems with traditional banking and financial service providers are payment delays, high fees, and liquidity shortages.
Luckily, stablecoins and on-chain liquidity providers are addressing the issues by offering up-to-date, real-time, and low-cost transactions.
Traditional payments are failing businesses
From merchants in Africa to freelancers in Southeast Asia to businesses in Latin America, individuals and companies have been suffering from delays, high fees, and liquidity issues in cross-border payments.
For example, using SWIFT, the global messaging network for financial transactions, has faced strong criticism for its inefficiency in global payments. While 66% of the SWIFT transactions arrive within 24 hours, it usually takes one to three business days for the funds that don’t need manual confirmation to be transferred in normal conditions—some transactions could take up to one month if they involve manual checks.
Let’s not forget the transaction fees that come with using SWIFT—sending fees, receiving fees, intermediary bank fees, and sometimes, foreign exchange fees.
Some of the main reasons behind the inefficiency of SWIFT transactions are compliance checks, incorrect payment details, and the involvement of multiple intermediary banks, to name a few.
Traditional fintech isn’t enough
The rise of digital payment platforms like Wise, PayPal, and Stripe has improved accessibility for many individuals and businesses in developed countries, but they still depend on traditional financial networks.
The problems with traditional payment systems come as the demand has been constantly rising. The global cross-border settlements reached $190.1 trillion in value in 2023, and the number is expected to surpass $290 trillion by 2030, according to a Foley report last August.
For every cross-border transaction to successfully reach its destination, it would have to go through multiple layers of processing and intermediaries—each layer adds fees and potential delays to the payments.
A business in Nigeria that receives payments from Europe, for instance, would normally need to convert its funds multiple times—from euro to US dollar to naira—before cashing out from a local bank. This will cost the business with extra fees.
This suggests a need for a payment system that eliminates these friction points. Both businesses and individuals need to access real-time transactions and liquidity. That’s why stablecoins, like Tether (USDT), and on-chain liquidity providers, like MANSA, have been seeing impressive growth over the last few years.
Real solution: Stablecoins and on-chain liquidity
Unlike the traditional banking system, stablecoins—cryptocurrencies pegged to a fiat asset like the US dollar—operate 24/7 without any middlemen, all thanks to the characteristics of blockchain technology—decentralization, immutability, and transparency.
Stablecoins have seen remarkable growth over the last five years. For instance, USDT’s market capitalization skyrocketed from $4.6 billion in March 2020 to over $142 billion so far—the total stablecoin market cap surpassed $230 billion. This development shows the strong utility of the asset class in facilitating efficient transactions.
However, to facilitate transactions seamlessly, stablecoins need liquidity. Digital payment infrastructure builders like MANSA are developing solutions to allow fast and flawless transactions across the world by providing on-chain liquidity. The key to enabling instant and transparent transactions, without any third parties like banks or payment networks, is by leveraging stablecoins and on-chain liquidity.
The Nigerian business example would look different with stablecoins. The supplier from Nigeria can receive USDT from the buyer in Europe and instantly convert the funds into the local naira using MANSA’s on-chain liquidity pools. This way, the business owner wouldn’t need to pay the multi-layer fees and reduce the transaction delays to a minimum.
Stablecoins and on-chain liquidity providers are already eliminating delays and transaction costs—the main issues that traditional finance has failed to achieve.
Underserved markets are the biggest winners
The real winners of stablecoin adoption are the underserved regions like Africa and Latin America. The net crypto imports of Brazil reached $12.9 billion in the first nine months of 2024, showing a 60.7% increase from the year before, according to a Reuters report. Notably, stablecoins accounted for nearly 70% of all crypto transactions in the country in 2024.
The growth of USDT remittances and crypto-to-fiat on-ramps in emerging markets is proof that users prefer stable, on-chain payments over traditional banking rails.
Regulators and policymakers should view stablecoins and on-chain liquidity as the solution since they reduce the systemic friction in payments, bank the underserved, and are more efficient for remittances.
Stablecoins and the future of global payments
Despite their growing adoption, stablecoins and on-chain liquidity providers are not here to replace traditional financial institutions—they are here to improve them. The future of payments is about flexibility, speed, and accessibility.
Financial institutions, payment services, and businesses are already integrating stablecoins into their payment flows. Last year, Wise became the first foreign company to gain access to Japan’s bank payment clearing network, Zengin. This allowed the company to significantly reduce cross-border transaction fees by eliminating the intermediary banks.
The shift from traditional finance to stablecoins is not speculative—it’s happening now as the demand for transparent, low-cost, and seamless global transactions increases. The rise of on-chain liquidity would potentially decline the reliance on outdated banking systems.
