Key Takeaways
- The Payments Association and Payall warn that issues continue to hamper the $1 quadrillion global payments market.
- As correspondent banking networks shrink, exporters in emerging markets are losing access to payment channels.
- While stablecoins are gaining ground in cross-border payments, experts say they are not a “silver bullet.”
Stablecoins and other emerging technologies will not solve the deep-rooted inefficiencies plaguing the cross-border payments market, according to a new report from the Payments Association and Payall.
Stablecoins Not the Answer?
Stablecoins are often heralded as potential pathways toward faster and cheaper payments, but the Payments Association cautions that innovation alone will not be enough without strong oversight.
“Stablecoins promise faster, cheaper, programmable money — but they’re not a silver bullet,” said Dr. Ruth Wandhöfer, industry expert and author of the white-paper.
Adding: “Without harmonized regulation and trusted infrastructure, innovation risks rebuilding on shaky ground.”
While stablecoin adoption was initially driven by crypto trading, its use in cross-border payments has emerged as one of the sector’s most promising real-world applications.
Remittance providers and fintech startups alike have begun seizing the technology’s potential to make international money transfers faster and cheaper.
A recent survey of U.S. remittance customers found that 26% had used stablecoins for sending money abroad.
Many fintech companies are now building cross-border payment platforms based on stablecoins, while traditional players such as Western Union are moving to integrate the assets to remain competitive.
However, the Payments Association claims that more regulatory trust and clarity are needed before they can truly succeed.
Cross-Border Payments Issue
The paper finds that long-standing challenges such as FX volatility, restricted liquidity, and regulatory fragmentation continue to weigh on global transactions.
According to the association, inefficiencies in the global cross-border payments market reached nearly $1 quadrillion in 2024.
One of the most significant obstacles, the paper notes, is the decline in correspondent banking relationships, a trend also documented by researchers at the Centre for Economic Policy Research (CEPR).
Over the past decade, the number of active correspondent banking ties has fallen by roughly 20–25%, driven by “de-risking,” according to the Payments Association.
This retrenchment, which sees global banks scale back relationships deemed too risky to maintain, has direct consequences for trade and economic growth, according to the CEPR.
“Once a firm’s main bank loses a correspondent relationship, its likelihood to continue exporting declines significantly,” the CEPR analysts said.
Adding: “Affected firms often cannot fully replace lost export revenues, leading to lower total turnover and job losses.”
The resulting gaps in cross-border access have driven up costs and restricted financial inclusion, issues the Payments Association says must be addressed before solutions like stablecoins can succeed.
The Need for Trust
The report proposes a “Global Single Shared Platform” to integrate existing bank systems and currencies, enabling cross-border transactions for both traditional and digital assets.
Gary Palmer, CEO of Payall, stressed that trust must underpin any future payment system.
“Trust must be the first mission of any cross-border payments technology,” he said. “A Global Single Shared Platform can uphold that trust, working with existing bank systems while empowering innovators to protect banks and preserve confidence across the ecosystem.”
Riccardo Tordera-Ricchi, Director of Policy and Government Relations at the Payments Association, stated that the industry’s priorities should focus on resolving the issues related to “limits and backing assets.”
“The Bank of England has taken significant steps forward, but still the proposed regime is the most punitive for stablecoin issuers and not in line with regulatory global best practice and industry trends,” he said.
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
