Stablecoins, a type of virtual token backed by a reserve asset and generally pegged 1:1 to the US dollar, have become a key vehicle to reduce costs, speed up operations and improve traceability in different types of cross-border payments, including remittances.
Regulatory advances, the mass adoption of platforms that allow these transactions at low fees, and adoption by users who want protection in a stronger currency, have allowed stablecoins to position themselves as a clear option for the transfer of funds.
In emerging economies such as those of Latin America and the Caribbean, stablecoins are becoming an important alternative for people to receive remittances at lower costs, especially benefiting countries affected by depreciation, inflationary pressures or markets where the financial system still charges high fees for this type of cross-border operation.
Stablecoins are tied to some type of real asset, which means that unlike other cryptocurrencies they are less affected by volatility and other shocks that strongly impact, for example, bitcoin.
According to the World Economic Forum (WEF), stablecoins can be backed not only by fiat currencies such as the US dollar or the euro, but also by commodities such as gold and other cryptocurrencies.
There is also the possibility that stablecoins may be linked to complex algorithms, designed to balance supply and demand.
Currently, the most popular stablecoins are USDT (Tether), USDC (USD Coin) and DAI, as they are widely used for payments, remittances and decentralized finance (DeFi) platforms.
Specifically, USDT stands out for its high level of liquidity, which means there is always a large volume of buying and selling available. This makes it easy to exchange quickly for other cryptocurrencies or fiat currencies. In addition, it is present in practically every crypto exchange in the world, making it one of the main channels to move capital between different markets and countries.
For its part, USDC has been increasingly adopted by companies and financial institutions, supported by regular audits that demonstrate each unit is backed by equivalent reserves such as US dollars and US Treasury bonds. This higher level of transparency, combined with regulatory support in key jurisdictions, has given it a reputation as a secure and predictable stablecoin.
Both have contributed significantly to the adoption of cryptocurrencies by providing a reliable tool for conducting fast and low-cost transactions.
Stablecoins have the potential to bridge the gap between traditional banking systems and the crypto ecosystem, as regulations in key economies such as the United States move forward to provide greater guarantees to users.
For this reason, financial and non-financial companies worldwide are seeking to adopt stablecoins to optimize cross-border operations, reduce costs and improve the traceability of international payments.
For stablecoins to be truly useful in practice, it is essential to have secure on- and off-ramps, which are the bridges that connect the traditional financial system with the digital ecosystem.
These mechanisms make it possible to convert traditional money (such as US dollars, Mexican pesos or Argentine pesos) into stablecoins through bank transfers, cards or cash.
At the same time, they allow those stablecoins to be converted back into local currency for withdrawals or everyday use. Without these ramps, adoption becomes more difficult and operational efficiency is lost.
Inswitch, which enables companies in Latin America to transform their cross-border payment solutions, addresses this challenge by offering an integrated infrastructure that allows businesses to manage this cycle in a fast, secure and traceable way.
As the stablecoin market expands alongside the growing remittance ecosystem, Inswitch offers a comprehensive financial platform that allows companies to integrate financial services easily through a single API connection.
With a modular, cloud-based architecture, the platform ensures agile implementation, high security standards and regulatory compliance, while also opening new revenue opportunities.
It also enables multi-currency transactions, provides real-time monitoring, offers competitive remittance fees and holds MSB licenses that cover all US states.
A favorable regulatory context
Recently, the US government approved the so-called Genius Act, which requires issuers to maintain backing in liquid assets and comply with licenses, while also establishing rules to provide greater transparency in the market.
“The Genius Act prioritizes consumer protection, strengthens the status of the US dollar as a reserve currency and reinforces our national security,” according to a White House bulletin. The new framework will also “make the United States the undisputed leader in digital assets, bringing massive investment and innovation into the country.”
The approval of this regulation is seen not only as a key step for the future of stablecoins but also as support for other crypto assets, being associated with the current rally that has taken bitcoin to 117,000 dollars as of July 29.
The path for stablecoins is only beginning, yet they are considered to have the potential to transform the global payments industry as they are implemented across multiple platforms.
According to figures compiled by McKinsey, “the circulation of stablecoins has doubled in the last 18 months, but they still facilitate only about 30 billion dollars in daily transactions, less than 1 percent of global money flows.”
In the business context, the use of stablecoins is expanding rapidly in the B2B environment because they offer an efficient and low-cost solution for payments, especially in international contexts.
Their digital infrastructure also facilitates integration into technology platforms through APIs or smart contracts.
For companies operating in multiple countries, especially in emerging markets with slow or costly banking systems, stablecoins represent an agile alternative to manage payments.
According to a report by McKinsey, stablecoins may represent a more efficient option compared to traditional money transfer mechanisms, provided regulation allows it.
“This is especially important in remittance corridors for migrant workers and to solve the payment problems faced by small businesses,” explains the consultancy.
Last year, remittances to Latin America and the Caribbean reached 161 billion dollars, a 5 percent increase compared to 2023, driven mainly by migrants in the United States and Europe, according to the Inter-American Development Bank (IDB).
With the new 1 percent tax on remittances sent from the United States, approved as part of the fiscal law, stablecoins could become a more affordable option for migrants to mitigate higher sending costs.
For every 1,000 dollars sent from the US, 10 dollars will go directly to cover taxes.
The new remittance tax in the US will take effect in January 2026, so migrants are expected to look for cheaper alternatives, with the risk of also turning to informal channels.
In this scenario, financial service companies have the opportunity to meet these needs by integrating stablecoin solutions to facilitate cross-border operations.
The McKinsey report notes that stablecoins stand out for their ability to provide near-instant settlements, compared to 1 to 5 business days in traditional systems.
This is combined with a significantly lower cost, with transactions possible for less than 0.10 dollars, compared to international transfers (15 to 50 dollars per transaction), ACH (0.20 to 1.50 dollars) or credit cards (1.5 to 3.5 percent of transaction value).
In international operations, stablecoins enable borderless payments with minimal or no FX commissions, eliminating the reliance on correspondent banks. Their digital design also allows for advanced programmability through smart contracts, reducing frictions and the need for manual intervention.
Another key point highlighted by analysts is the full transparency provided by blockchain technology, with complete traceability of each step in the transaction. They also reduce settlement risks by operating directly peer-to-peer, without intermediaries.
At the same time, stablecoins provide continuous availability, operating 24/7, unlike banking systems limited by hours or business days.
Risks, compliance and mitigation strategies
Throughout their history, the stablecoin ecosystem has also faced several challenges, including weak KYC (Know Your Customer) and AML (Anti-Money Laundering) processes by some issuers and exchanges.
Like any financial instrument, stablecoins are not immune from being used by malicious actors who may leverage them to commit crimes such as money laundering, exploiting gaps in ecosystem policies.
This can result in sanctions, frozen accounts or audits for companies, which in turn may lead to financial losses and other consequences that damage corporate reputation.
In general, the implementation of strong AML and KYC policies creates a healthier environment within the stablecoin ecosystem, making operations more transparent and traceable.
This not only strengthens user trust in the use of stablecoins, but also provides the necessary support for them to advance and consolidate among institutional actors, gaining legitimacy and space in the traditional financial system.
The WEF notes that while the market has faced liquidity and stability challenges since its beginnings, the ecosystem has matured over time and several stablecoins have remained consistent.
To mitigate risks in the implementation of stablecoins, companies must adopt a risk-based approach, with evaluations, response measures and resources to address them.
At the same time, it is essential to apply thorough customer due diligence and work with regulated providers that comply with KYC/AML standards.
For example, Inswitch holds MSB licenses in the United States and integrates client verification processes, which guarantees traceability and legal compliance in every transaction.
Additionally, strengthening internal cybersecurity and investing in team training —with measures such as firewalls, strong authentication and fraud prevention— is key to minimize vulnerabilities and maximize the advantages of stablecoins.
Case study: white-label wallet + stablecoins
In an environment where agility and efficiency are essential for fintechs operating internationally, more companies are seeking alternatives to the traditional banking system to manage payments and transfers.
Consider the case of a fintech that needs to distribute 200,000 dollars in USDC to its users.
Instead of using traditional banking channels, it chooses to implement a white-label digital wallet through the Inswitch platform, which supports electronic money, local currencies and stablecoins such as USDC.
Through this service, the company accesses the Inswitch network to acquire USDC via a regulated channel, under a contractual agreement.
The operation is executed in just a few hours and settled in real time through a regulated OTC (Over-the-Counter) service, with funds credited directly to the fintech’s corporate wallet.
The so-called OTC service is a private channel through which companies can acquire or liquidate large volumes of stablecoins directly with a provider or liquidity desk.
In cross-border payments, OTC operations with stablecoins allow companies to access better rates, instant liquidity and greater privacy, all under a regulated framework that ensures traceability and compliance.
The entire process is backed by corporate KYC/KYB checks, AML compliance and transparent FX negotiation.
Thanks to this solution, the fintech is able to send funds quickly, securely and traceably, without depending on local crypto licenses or facing the high costs and delays of the traditional banking system.
This example illustrates how Inswitch enables companies to integrate stablecoins into their financial operations efficiently, while ensuring compliance and optimizing cash flows.
How Inswitch enables this technology securely
Inswitch offers advanced financial infrastructure that allows Latin American companies —such as fintechs, remittance platforms or money transmitters— to use stablecoins and carry out cross-border payments efficiently, securely and under regulation.
The platform is built on an API-based architecture, which makes it easy to integrate financial services into digital wallets, mobile apps, websites or even channels such as WhatsApp.
This allows companies to maintain their brand identity with a customizable white-label wallet solution.
Inswitch holds MSB licenses that provide regulatory coverage in all US states, enabling operations with full legal compliance on both ends of the transaction.
It also integrates KYC/KYB verification tools, real-time fraud monitoring and compliance controls, ensuring security in every transaction.
In practice, this means a company can fund operations in the United States using cards, ACH transfers, wallets, checks or even cash, and then send those funds as stablecoins (such as USDC) through secure, multi-currency wallets with instant transfers.
Through partnerships with global networks such as Mastercard Cross Border, Inswitch extends its reach to more than 30 countries, with over 250,000 cash-out points and alliances with more than 160 banks, expanding the possibilities for the use and conversion of funds.
In summary, Inswitch enables the use of stablecoins as part of a modern, regulated and modular solution that simplifies international payments, protects every transaction and allows companies to scale financial services across Latin America and beyond.
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