Banks test stablecoins for faster cross-border payments

Stablecoins are moving beyond crypto markets and into mainstream payments. Banks, fintechs and large corporates are testing the tokens for cross-border transfers and treasury operations.

This marks a shift in how businesses view stablecoins, which were originally developed to reduce the price volatility associated with cryptocurrencies such as bitcoin. Instead of serving mainly as a trading tool on crypto exchanges, they are increasingly being assessed as a faster, more efficient way to move money across borders.

Most major stablecoins are designed to maintain a fixed value against a traditional currency, usually the US dollar. Early versions, such as Tether, sought to preserve a one-to-one peg by holding reserves, while newer coins, including USDC and GUSD, are typically backed by cash or government bonds.

That backing has taken on greater importance since the collapse of TerraUSD, an algorithmic stablecoin without conventional reserves. The failure intensified regulatory and corporate scrutiny of whether issuers can prove their reserves are transparent and meet redemption requests on demand.

Corporate trials

Large businesses are starting to treat stablecoins as a practical financial tool rather than a niche crypto product. Treasury and payments teams are running pilot programmes to test whether token-based transfers can improve internal fund movements, supplier payments and customer transactions.

Several banks, including Bank of America and Citigroup, have publicly discussed exploring their own dollar-backed coins. Other large companies have also been linked to potential projects, with retailers such as Amazon and Walmart reportedly showing interest.

A more supportive policy environment has helped drive those discussions. In the US, a federal stablecoin law known as the GENIUS Act has created a clearer framework for issuance and use, giving companies more confidence to test token-based payments or branded digital coins.

Cross-border focus

International payments have emerged as the clearest area of business interest. Traditional cross-border transfers often move through several correspondent banks and can take days to settle, with each stage adding cost, delay and operational friction.

Stablecoin transfers offer an alternative. A company can convert fiat currency into stablecoins, send the tokens over a blockchain network, and convert them back into local currency at the receiving end. The process does not eliminate the need for banking infrastructure, particularly for final conversion into domestic money, but it can reduce the number of steps in between.

Industry research suggests this model could cut settlement times from days to seconds and sharply reduce fees. A KPMG analysis found that stablecoin rails could reduce cross-border fees by up to 99%.

Visa has already tested the model in business payments. In one pilot, businesses pre-funded cross-border payouts with stablecoins rather than fiat balances, aiming to move funds instantly and reduce the need to hold large sums in bank accounts for settlement.

Treasury use

Companies are also assessing whether stablecoins can improve liquidity management across multiple markets. Because token transfers can settle continuously rather than only during banking hours, finance teams could move funds between subsidiaries without waiting for local cut-off times.

That could reduce idle balances and improve visibility over cash positions. Singapore's central bank has highlighted the potential for stablecoins to let treasury teams move cash globally in seconds rather than days.

Beyond payments, some banks and asset managers are trialling tokenised funds and stablecoin-based settlement for securities trades and interbank transactions. Payment groups, including Stripe and Square, have also added stablecoin support to their networks, suggesting the technology is being integrated into more conventional payment infrastructure.

Regulatory guardrails

Regulation remains central to whether stablecoins achieve wider business adoption. Authorities in the European Union and Singapore now require issuers to hold fully backed reserves and provide redemption rights. At the same time, US rules impose anti-money-laundering, know-your-customer, and audit requirements.

Supervisors have also warned of broader financial risks. The European Central Bank has said rapid growth in stablecoins could draw deposits away from banks and create stress in government bond markets if a large token came under pressure.

At the same time, clearer rules have made businesses more willing to test the technology. Stablecoins are increasingly viewed less as speculative crypto assets and more as tightly supervised instruments operating alongside existing financial systems.

Still early

For now, widespread use remains limited. Only a few hundred businesses worldwide are thought to use stablecoins regularly, and most deployments are still at the pilot or experimental stage.

Even so, transaction volumes are rising, and the direction of travel is becoming clearer as businesses look for faster ways to move money internationally. Stablecoins are not replacing banks or cash, but they are increasingly being positioned as a digital layer atop existing payment rails.

Treasury platforms, enterprise resource planning systems and payment networks are beginning to support token transfers, showing how a product that began as a tool for crypto traders is moving into mainstream corporate finance.