Admin · The Payments Corner

Excerpt

Content

A dollar-backed stablecoin is designed to be worth one dollar. It does not offer capital appreciation, and the token itself does not inherently generate interest. Some platforms offer rewards to customers who hold stablecoins with them, but those returns come from the platform's business model, not from the token, and they do not change the question this article examines. Unlike stocks, bonds, or other investment instruments, a stablecoin's value proposition does not depend on generating a financial return for the holder.

That raises a question worth asking as stablecoins move into mainstream financial services. If a stablecoin represents the same monetary value as the currency we already use, what incremental economic benefit does converting that currency into a token actually create?

The industry's case is familiar: faster settlement, lower transaction costs, around-the-clock availability, cross-border reach, and programmability. Some of these capabilities already exist in modern payment systems. What is new is the possibility of combining them in a single, open infrastructure that can reach people and corridors the existing system has served poorly or expensively.

One application stands out: the movement of relatively small amounts of money across borders, especially payments made by individuals and families for whom transaction costs represent a meaningful share of their disposable income.

In this context, even modest efficiencies produce tangible benefits. And the value of a stablecoin may ultimately have less to do with what it is than with how much more money reaches the person who needs it.

## The Economics of a $200 Transfer

Consider someone working in the United States who regularly sends $200 to support family members in another country. The money may cover groceries, utilities, transportation, or other essential expenses. The sender is not looking for an investment product. The objective is simply to transfer purchasing power from one person to another, reliably and at the lowest reasonable cost.

The $200 figure is not arbitrary. It is the benchmark amount the [World Bank's Remittance Prices Worldwide database](https://remittanceprices.worldbank.org/) uses to measure the cost of sending money, and by that measure the global average cost stood at 6.36% in the World Bank's April 2026 report, more than double the 3% target set for 2030. That is a meaningful expense, particularly for smaller and more frequent transfers.

For these consumers, reducing the cost of moving money has an immediate economic impact. Every reduction in fees or foreign exchange charges means a greater portion of the sender's earnings reaches the recipient.

Stablecoins can contribute to that outcome by reducing dependence on multiple financial intermediaries and allowing value to move across blockchain networks without passing through the traditional correspondent banking chain.

A [March 2026 Federal Reserve analysis](https://www.federalreserve.gov/econres/notes/feds-notes/payment-stablecoins-and-cross-border-payments-benefits-and-implications-for-monetary-policy-20260330.html) examines precisely this possibility. By shortening the payment chain and reducing certain intermediary costs, stablecoins could improve the economics of cross-border transfers.

The cost of transferring a token across a blockchain, however, is not the same as the total cost of completing a remittance. The sender may need to convert dollars into stablecoins. The recipient may need to exchange those stablecoins for local currency, withdraw cash, or transfer the proceeds into a bank account. Each step can introduce fees, foreign exchange spreads, liquidity requirements, or operational complexity.

A [July 2026 study by Banca d'Italia](https://www.bancaditalia.it/pubblicazioni/mercati-infrastrutture-e-sistemi-di-pagamento/approfondimenti/2026-086/index.html) sent 200 USDC, the World Bank's benchmark amount, across ten corridors linking Italy with Argentina, Brazil, Japan, South Africa, and the United Arab Emirates. Total costs ranged from 0.30% to nearly 9%, with the blockchain transfer itself representing only a marginal portion of the expense. Compared with an established digital remittance provider, the stablecoin route was cheaper in three corridors and more expensive in four. None of the corridors originated in the United States, but the lesson travels: the on-ramp and off-ramp, not the blockchain, determine the price.

Read correctly, this is an encouraging finding. The blockchain leg, the part that is genuinely new, is already nearly costless. The remaining expense sits in the on-ramps and off-ramps, which are conventional operational problems that competition, regulation, and scale have solved before in other payment systems. The study does not show that stablecoins cannot lower remittance costs. It shows exactly where the work remains to be done.

The right comparison is not between a blockchain transfer and an expensive international bank wire. It is between a complete stablecoin-enabled service and the best practical alternatives already available to the customer, including established digital remittance providers.

For someone sending $200 home, the measure is straightforward: how much spendable money does the recipient actually receive, how quickly, and with what degree of certainty?

## Financial Inclusion Is More Than Lower Transaction Costs

This leads to a second question that may be even more consequential.

Assume stablecoins can materially reduce the cost of certain cross-border payments. How do those efficiencies reach consumers who may have limited experience with digital financial products, constrained access to banking services, or little familiarity with cryptocurrency?

We should be careful not to equate lower income with lower financial literacy. Many consumers who rely on remittances are experienced financial decision-makers who regularly compare providers, exchange rates, fees, and delivery methods. Their financial priorities may be quite sophisticated, even when their access to financial services is constrained.

Nevertheless, using stablecoins directly can introduce unfamiliar requirements. Depending on the product, customers may need to understand digital wallets, custody arrangements, blockchain networks, transaction confirmations, and the consequences of sending funds to an incorrect address. These are not trivial considerations when the transaction involves money needed for everyday expenses.

A [2025 academic study of 866 U.S.-based adults engaged in remittance activities](https://doi.org/10.1016/j.tele.2024.102230) found that digital and financial literacy were positively associated with stablecoin adoption. Knowledge and familiarity influence participation, even when the underlying technology offers economic advantages.

But this is where the industry has an opportunity to rethink its approach.

Why should someone sending money to family members need to understand stablecoins at all?

Consumers use debit cards without understanding authorization messages, clearing cycles, interchange arrangements, or settlement accounts. They use mobile banking applications without knowing how the underlying infrastructure processes transactions. The technology is complex, but that complexity is absorbed by the institutions and service providers delivering the product.

Stablecoins can follow the same model.

Imagine a remittance application in which a customer enters $200, selects a recipient, sees the exchange rate and total cost, and confirms the payment. Behind the scenes, the provider uses stablecoins to move value between jurisdictions, handles the currency conversions, and delivers the proceeds through a local bank account, mobile wallet, or cash-out network.

The consumer never needs to purchase a stablecoin, select a blockchain, or manage private keys.

In that arrangement, stablecoins are not a consumer-facing financial product. They are an infrastructure component that lets the provider deliver a conventional financial service more efficiently.

That distinction could prove decisive for financial inclusion. If the technology's benefits depend on consumers becoming knowledgeable cryptocurrency users, adoption will remain concentrated among people already comfortable with digital assets. If the technology is embedded within familiar financial experiences, its reach becomes considerably broader.

## Early Experiments Point the Way

Initiatives exploring how stablecoins can serve populations with limited financial resources are already under way.

In September 2026, [GiveDirectly published results from a pilot with Coinbase](https://www.givedirectly.org/coinbase) involving 160 low-income young adults in New York City. Participants received $12,000 each over six months through USDC-based transfers, including an initial $8,000 lump sum. GiveDirectly reported that all payments were delivered successfully, transfer fees were below 1%, and 89% of recipients felt safe receiving the funds through the arrangement.

The program also relied on step-by-step guidance and customer support to help participants navigate an initially unfamiliar system.

The experiment demonstrates that stablecoin-based payments can be delivered successfully to consumers without prior cryptocurrency experience. The next step is to show, at larger scale, that the technology delivers advantages beyond what conventional payment methods offer, and to separate the benefit of receiving assistance from the incremental benefit of the rail used to deliver it.

Another initiative, [launched by Mercy Corps Ventures and Fonkoze in Haiti](https://www.mercycorpsventures.com/blog/digital-cash-in-fragile-contexts-cash-transfers-in-stablecoins-for-vulnerable-women-in-rural-haiti), is evaluating stablecoin-based assistance for 200 vulnerable rural women. Its design includes a digital wallet, participating merchants, local cash-conversion points, and support through existing community financial institutions.

This initiative is particularly instructive because it treats financial access as more than a digital transfer mechanism. Consumers must be able to receive, store, convert, and spend the funds within their local economic environment, and the program is built around all four.

These initiatives remain limited in scale, and their findings should not be generalized prematurely. But they point to the operational reality that will determine success: adoption depends as much on distribution, usability, and trust as on transaction processing.

## Building Trust Into the Infrastructure

Any serious case for stablecoins in financial inclusion must address consumer protection, particularly for financially vulnerable populations.

Stablecoins introduce risks that consumers may not encounter in the same way when using regulated bank accounts or established remittance services: issuer and redemption risk, irreversible transfers, wallet compromise, fraud, and uncertainty about recourse when something goes wrong.

An international payment that settles almost immediately offers little comfort if it is sent to the wrong recipient and cannot be recovered.

Intermediaries also perform functions beyond transferring money. They investigate disputes, monitor suspicious activity, provide customer service, establish consumer protections, and manage operational exceptions. These functions carry costs, but they also create value.

The [IMF's December 2025 study, *Understanding Stablecoins*](https://www.imf.org/en/-/media/files/publications/dp/2025/english/usea.pdf), highlights the operational, fraud, and consumer-protection risks associated with stablecoin arrangements, particularly where users lack the knowledge or resources to identify and manage them.

Consumers appear to understand this. In a [September 2026 Visa survey](https://investor.visa.com/news/news-details/2026/Safeguards-Could-Boost-Stablecoin-Use-Among-Americans-Finds-Visa-Study/default.aspx) of U.S. adults, stated interest in using stablecoins rose from 36% to 56% when the hypothetical product included bank-level fraud protection and deposit insurance.

That is an opportunity, not an obstacle. The commercial path forward is not simply to remove financial intermediaries, but to redesign the roles they perform. Stablecoin infrastructure can reduce the costs of moving liquidity and settling payments, while financial institutions and payment providers continue to deliver the protections, accessibility, and service consumers require. Done well, that combination can produce a financial product that is both cheaper and safer than what many remittance senders use today.

## Making Sure the Savings Reach the Sender

One further question will shape how much of this potential is realized.

Even if stablecoins reduce the cost of transferring money between financial institutions or payment providers, those savings will not automatically reach consumers.

Any provider that adopts stablecoin settlement may do so because it simplifies operations or lowers the cost of moving money internally. Those benefits can improve operating margins without changing the price paid by the customer.

There is nothing unusual about this. Payment networks, processors, banks, and fintech providers regularly capture efficiencies that may or may not translate into lower consumer prices.

But it matters when financial inclusion is presented as a principal justification for adopting a new technology. We should distinguish between reducing the cost of delivering a payment and reducing the price charged to the person making it.

Here the outlook is encouraging. Lower infrastructure costs lower the barrier for new entrants to challenge established pricing, and incumbents that adopt the same technology to stay competitive will face pressure to share the gains. Transparent pricing, which the World Bank's benchmark already makes possible, gives consumers the tools to reward providers that pass savings through.

For a lower-income household, the financial inclusion argument is meaningful when the new arrangement makes money more affordable to move, more accessible to receive, and more reliable to use, without introducing disproportionate new risks. That is a high bar, and a reachable one.

## The Real Test of a Tokenized Dollar

The economic value of stablecoins should not be assessed primarily by the number of tokens in circulation, the volume of blockchain transfers, or the technical sophistication of the networks supporting them. Those indicators describe the scale of the ecosystem, but they do not measure the benefits delivered to people and businesses.

A dollar does not become more valuable simply because it has been tokenized. Its purchasing power remains the same, provided the stablecoin maintains its intended value.

What can change is the cost, accessibility, and efficiency of putting that dollar to work.

And there is one circumstance in which a tokenized dollar may genuinely deliver more value than the dollar it represents: when the recipient can hold it as a dollar. For a family in an economy with high inflation or a weakening currency, receiving dollars that can be stored and spent without immediate conversion may protect purchasing power that a local-currency payout would steadily erode. In that case, the benefit lies not only in how the money moved but in what the recipient is able to do with it after it arrives. Realizing that benefit depends on local merchants, cash-out points, and regulation that allow the dollar to remain a dollar, which is precisely the infrastructure the early pilots are beginning to build.

For institutional users, the benefits include improved settlement, more flexible liquidity management, and access to new transaction environments. For individuals and families, the promise is more direct: sending money at a lower cost, receiving more of its value, and in some cases preserving that value once it arrives.

Delivering on that promise is the payments industry's responsibility. Financial inclusion cannot depend on consumers mastering an entirely new financial infrastructure. It depends on building products that translate technological efficiency into accessible services, supported by appropriate protections and familiar experiences.

**The most consequential stablecoin application may not be one in which consumers actively choose to use stablecoins, but one in which they benefit from the technology without ever needing to know it is there.**

I believe that outcome is achievable. The pieces are already emerging: near-costless settlement, maturing regulation, established institutions learning to use the rails, and early programs proving that people without crypto experience can receive and use digital dollars safely. What remains is to connect them into services that are simple, protected, and priced so the efficiency reaches the people moving the money.

If the industry does that, the value of a tokenized dollar will not be measured by how differently it moves, but by how much more of it arrives.

Audio script

Metadata

Author

Name

Role

Audio briefing

No audio briefing produced yet.

Save changes first if you just edited the script. Generation calls ElevenLabs and writes to R2 — takes ~10–30s for typical scripts.

Edits aren't saved until you click Save.