Dive Brief:

• Stablecoin use in cross-border transactions is gaining momentum, although it remains early days for stablecoins in overall business payments, according to two analyst reports issued last week on the digital assets.
• Industry adoption will “rely heavily on a combination of greater regulatory clarity and partnerships that can help alleviate the complexity of launching, using and managing stablecoins,” S&P Global Market Intelligence wrote in a May 11 report.
• Stablecoins offer “core technical advantages” in their “near-instant 24/7 settlement and the ability to support programmable payments,” Moody’s Ratings said in a May 13 report. In terms of cross-border payments, stablecoins can settle for 0.1% to 0.5% of a transaction value, compared to an average remittance cost above 6%, Moody’s said.

Dive Insight:

About $269 billion in stablecoins are in circulation, with that figure expected to increase to $434 billion by 2028, according to estimates from S&P Global Market Intelligence.  

About 99% of the “fiat-backed stablecoin supply” is tied to the U.S. dollar, Moody’s analysts said. “This dominance reflects the dollar’s existing role as the principal currency for global trade, cross-border finance and crypto trading, and the depth of the U.S. T-bill market in which most issuers hold their reserves,” Moody’s wrote. 

Stablecoins are tied to the value of fiat currency such as the dollar or euro, with their value considered less volatile than other cryptocurrencies such as bitcoin and Dogecoin.  

Cross-border payments adoption has been “concentrated in specific markets,” the Moody’s report said. Argentina processed about $34 billion in stablecoin transactions in 2024, and Nigerian volumes of USDC — the stablecoin issued by Circle Internet Group — exceeded $3 billion per month last year, according to the report.

“Consumer use cases, by contrast, remain at the margin, accounting for roughly 0.2% of global e-commerce transaction value,” Moody’s analysts wrote.

Beyond stablecoins’ appeal for cross-border transactions, S&P Global Market Intelligence highlighted two other use cases where the digital asset is finding a niche: payroll and contractor payments and intercompany payments.

U.S. companies that pay employees in other countries with dollars can encounter delays and other issues with traditional payment methods, according to the report by analyst McKayla Wooldridge.

“When the earnings are converted into local fiat, changing currency values and FX fees can obscure visibility into the true value of (employees) earnings,” the report noted.

Numerous payment players, including Visa, Mastercard, Stripe and Worldpay, are among those with stablecoin payment options. Last week, Corpay announced a partnership with stablecoin infrastructure firm BVNK, which Mastercard is acquiring, to enable stablecoin wallets and settlement capabilities.

Stablecoins can also become a new rail “to help streamline intercompany settlement,” the S&P report said. 

“Treasury teams can move funds across regions and departments, bypass intermediaries, and settle in minutes on the blockchain,” the report said, noting that exchange rates, different tax regulations and multiple accounting systems can delay intercompany transactions.