Stablecoins Could Cut Cross-Border Payment Costs by 99%, KPMG Says

Institutions are increasingly exploring stablecoin technology to reduce costs, accelerate settlement, and unlock liquidity in the $150 trillion global payments market, according to a report from KPMG last month.

Currently, banks rely on a correspondent banking network that moves roughly $150 trillion annually. The system typically takes two to five days to settle, involves multiple intermediaries, and costs $25 to $35 per transaction, the report noted. To ensure liquidity, institutions must maintain large balances in nostro and vostro accounts, a process that ties up capital and creates inefficiencies—problems stablecoins are well-positioned to solve.

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From Days to Seconds

Stablecoins are cryptocurrencies pegged to assets like the U.S. dollar or gold, with Tether’s USDT and Circle’s USDC leading the market. KPMG highlighted that blockchain-based stablecoin solutions can reduce settlement times from days to minutes—or even seconds, depending on the network. Transaction costs can also drop dramatically, in some cases by more than 99% compared to traditional rails.

Lower prefunding requirements free up trapped capital, improving liquidity and allowing institutions to deploy resources more efficiently. Additionally, these networks offer real-time tracking and auditability, increasing transparency and aligning with evolving regulatory expectations.

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Early Adoption by Major Institutions

KPMG noted that some financial institutions are already moving significant value on blockchain rails. JPMorgan processes around $2 billion in daily transactions via its blockchain platform, while PayPal, which launched its stablecoin in 2023, has grown the token’s market capitalization to $1.17 billion.

These examples demonstrate early adoption and a clear market appetite for stablecoin-powered cross-border payments, highlighting how digital assets are reshaping global financial infrastructure in practical, revenue-generating ways.