How Stablecoins Are Set to Cut the Cost of Cross-Border Payments

Issue 729: 30 June 2025

How Stablecoins Are Set to Cut the Cost of Cross-Border Payments

A guest blog by John Bertrand.

A stablecoin for currency is a token that can be used alongside the parent currency reflecting the market price at that instant. The historic volatility is known, and the price can be verified publicly.

Earlier attempts to use crypto currencies fell afoul of Herstatt Risk . The fiat currency had not left the sender’s bank before the amount transferred at the receiver’s bank had been moved.

In addition, the crypto currency’s own volatility could add 10% to exchange cost. Stablecoins are valued one to one to their parent. For example, Tether (USDT) and USD Coin (USDC), both pegged to the US dollar on a 1 to 1 basis.

Up to now US stablecoins are regulated by individual states, for example New York applies its existing virtual currency regulations to stablecoins rather than treating them as a separate asset class.

On June 17, 2025, the U.S. Senate passed the “Guiding and Establishing National Innovation for U.S. Stablecoins Act” or “GENIUS Act.” The legislation would limit the issuance of payment stablecoins in the United States to “permitted payment stablecoin issuers” (“PPSIs”) and qualifying foreign issuers.

A foreign issuer would be permitted to offer and sell stablecoins becoming subject to OCC supervision, among other things.