World without borders: Will stablecoins dominate the remittance market?

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Eugene Komchuk

08.01.2025

World without borders: Will stablecoins dominate the remittance market? — Stablecoin perspectives

The remittance market is undergoing a transformation. While giants like PayPal and Western Union once dominated cross-border transactions, stablecoins are now becoming increasingly popular for international money transfers.

The origins of cross-border transfers

The concept of cross-border money transfers began to take shape in the 19th century with advancements in international postal and telegraph communication. One of the first companies to offer such a service was Western Union, which launched a telegraph transfer system in 1871. This was a revolutionary step in finance, allowing people to send money abroad within hours—a process that was considered remarkably fast for its time.

Western Union office in Chicago (1887). Source: wabaunseecomuseum.org

As banking systems evolved in the 20th century, the popularity of international transfers grew significantly. The advent of the internet further simplified and accelerated such transactions. In the 21st century, mobile apps revolutionized the remittance market, with leaders like Wise, Remitly, PaySend, and Western Union dominating the space. Each service offers unique advantages, such as Wise's instant transfers or PaySend's focus on fixed fees and user convenience.

Stablecoins take the lead

By 2024, the landscape of the remittance market shifted dramatically. Traditional remittance apps began losing ground to stablecoins—digital assets pegged to fiat currencies like the US dollar or the euro. Stablecoins stand out due to their low fees and rapid transaction speeds.

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According to VISA, stablecoins processed $28.7 trillion in transactions in 2024, surpassing the $685 billion handled by traditional remittance channels. Regions like India, Mexico, and the Philippines have emerged as leaders in adopting crypto-based solutions.

The most popular stablecoins

The most successful stablecoin globally remains Tether (USDT), which commands approximately 75% of the market share. USDT is traded on most cryptocurrency exchanges and is available across various blockchains.

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USD Coin (USDC), issued by the Centre consortium, is the second most popular stablecoin, valued for its transparency and backing by major financial institutions like Visa and Mastercard.

Another noteworthy stablecoin is Ethena (USDe), which operates on a fully decentralized and algorithmic model. Pegged to the US dollar, USDe relies on complex smart contracts and automated liquidity management protocols.

Additionally, Ripple recently introduced RLUSD, a stablecoin launched less than a month ago. Despite being new, its market capitalization has already exceeded $53 million, with upcoming exchange listings expected to drive further growth.

Why stablecoins are essential

Stablecoins are becoming an integral part of both the cryptocurrency ecosystem and traditional finance. Their key feature—price stability tied to fiat currencies like the US dollar—makes them an attractive tool for global transactions.

In 2024, stablecoins expanded beyond the crypto market, increasingly replacing traditional remittance apps. Their technological simplicity, minimal fees, and borderless nature make them highly appealing, especially in regions with limited banking access. According to UN forecasts, migrants will send home over $5 trillion by 2030, and stablecoins are likely to capture a growing share of such transactions.

Why do people choose stablecoins? Unlike traditional financial apps, stablecoins operate 24/7. The absence of intermediaries like banks or payment systems eliminates high fees. Furthermore, blockchain technology ensures greater transparency and reliability.

Thanks to these features, stablecoins have gained popularity among freelancers, small businesses, and migrants who prioritize speed, accessibility, and cost-efficiency. With their current momentum, stablecoins have the potential to become the global standard for financial transactions.

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