March 21, 2025 ☼ Crypto ☼ Payments
Cross-border payments encompass four primary use cases: B2B, C2B, B2C, and C2C. Each implements different operational models, such as traditional banks using SWIFT and currency swaps or remittance providers like Wise using optimized local settlement models.
Stablecoins present an opportunity for disruption, but their utility differs by scenario. Here’s an analysis of existing TradFi cross-border solutions based on cost, time, ease of use, CLV/CAC* and transaction volumes (based on my personal understanding, not backed by data).
| Parameter | B2B (Payments) | C2B (Collections) | B2C (Payouts) | C2C (Remittances) |
|---|---|---|---|---|
| Cost | Low | Moderate | Moderate | High |
| Time | Slow | Moderate | Moderate | Fast |
| Ease of Use | Complex | Moderate | Moderate | Simple |
| CLV/CAC | High | Moderate | Moderate | Low |
| Volume | High | Moderate | Low | Low |
In B2B payments, orchestrating cross-border transactions is inherently complex, as companies must navigate multiple currencies, regulatory frameworks, and financial institutions. Stablecoins address this by streamlining the process through partnerships with specific liquidity providers in regions where fiat-stablecoin swaps are common.
These tie-ups handle the on-ramp and off-ramp requirements seamlessly, reducing the need for multiple intermediaries and enabling businesses to bypass traditional banking rails. For example, in corridors like USD-CAD or EUR-GBP, with high stablecoin liquidity potential and low currency volatility, these solutions can offer reliable and efficient transaction pathways.
Stablecoins reduce costs and delays by bypassing intermediaries like SWIFT and correspondent banks. Integrating yield farming solutions with crypto wallets could allow businesses to optimize idle funds, enabling more efficient money management. These wallets can also facilitate access to on-chain lending, providing businesses with quick, low-cost financing options, further enhancing the appeal of stablecoins.
A focused entry into tech-savvy industries like ecommerce or SaaS allows stablecoin providers to grow via referral networks. Once one company adopts the model, their domestic suppliers and clients are incentivized to join, further scaling adoption. Over time, business tools such as tax management and invoicing can be integrated.
While trust in stablecoins remains a concern, this can be mitigated through audits, insurance guarantees, and partnerships with entities ensuring zero-liability solutions. Such measures mirror the protections already familiar to consumers via payment networks like Visa and Amex.
Remittances dominate forex narratives but have small volumes and face stiff competition. Companies like Wise have fine-tuned batching models and streamlined local currency settlements to minimize costs and time, making it difficult for stablecoins to offer a compelling advantage. Even with trust and efficient infrastructure, breaking into this space poses significant hurdles for stablecoin solutions.
Stablecoin payments hold the most promise in the B2B sector, where the gap between TradFi and DeFi is largest. By targeting specific geographies, focusing on payment orchestration and leveraging existing industry trust mechanisms, stablecoins can become a game-changer for global business transactions.
CLV/CAC: Customer Lifetime Value / Customer Acquisition Cost
I wrote this post expanding on Matt Brown’s Cross-border Payments in ~1,000 Words