How issuers can use stablecoin-based remittances to realize compelling opportunities for economic impact and expansion into new markets

Cross-border payments remain structurally inefficient and cost-intensive.

According to the World Bank, the average global cost to send a $200 remittance in 2024 was approximately 6.62% as of September 2024, or $13.24, with significant regional variation depending on provider, corridor and regulatory requirements (World Bank Remittance Prices Worldwide, September 2024).

By contrast, stablecoins offer a potential pathway for low-cost settlement, with transaction fees often below $0.01 on certain Layer 2 and high-throughput networks.

However, fragmentation and closed systems have limited stablecoins' utility.

Take USDC: for years, fragmentation across blockchains was a serious issue. Different wrapped versions of the same asset created confusion and inefficiencies.

To address this, Circle developed the Cross-Chain Transfer Protocol (CCTP), now live on supported chains including Solana, Ethereum and Avalanche. CCTP allows USDC to be burned on one chain and minted on another, preserving fungibility and ensuring native redemption (Circle Developer Docs, 2024).

Not all issuers have the technical or regulatory resources Circle brings to the table. That’s where infrastructure like Interchain Token Service (ITS) comes in—enabling any issuer to achieve native-like interoperability across chains. 

As this article will show, the cross-border remittances market is an attractive target for financial institutions entering cryptocurrency via stablecoin issuance. We will explore the opportunities and challenges, including secure, compliant interoperability across multiple blockchain ecosystems.

Stablecoins in cross-border payments: a strategic and societal opportunity

In the United States, stablecoin issuers have quietly emerged as significant financial actors. As of early 2025, they rank among the top 20 direct holders of U.S. Treasuries globally—surpassing countries like Germany and Mexico (Outlier Ventures, 2025). This development underscores not only the scale of stablecoin reserves but also presents a geopolitical opportunity: aligning stablecoin regulation with U.S. fiscal and monetary policy could cement strategic influence over a growing segment of global financial infrastructure.

Globally, stablecoins are uniquely positioned to improve the efficiency and equity of cross-border financial flows. Remittances to low- and middle-income countries surpassed $685 billion in 2024, with an average fee of 6.62% (World Bank, 2024). This equates to over $41 billion in annual transaction costs—a burden that disproportionately affects populations that to date are underserved by existing banking and financial systems, representing a greenfield for financial institutions entering this category with a better product (World Bank Blogs, 2022).

Stablecoins moved an eye-opening $15.6 trillion in value in 2024—effectively matching Visa’s annual volume (a 16z crypto, 2025). Remittance flows in the hundreds of billions may appear modest by comparison. Yet their significance lies in social utility: much of stablecoin volume today is for speculative trading and investment purposes—as much as 90% initiated by bots or large-scale traders (Bloomberg, 2024). Unlike speculative transactions, remittances are vital for household sustenance, education and medical needs in recipient countries. Stablecoins offer a compelling alternative that could deliver both cost savings and financial inclusion at scale.

The New Playing Field: Challenges and Opportunities in a Fragmented Regulatory Landscape

Stablecoin legislation is tightening, but also maturing. The emergence of jurisdiction-specific regulatory regimes (e.g., GENIUS Act in the U.S., MiCA in the EU) reflects a global shift toward formal integration of stablecoins into the mainstream financial system.

However, this evolution brings technical and operational complexity. Each jurisdiction introduces its own set of compliance expectations—ranging from reserve requirements to token freezing and disclosure standards. These legal distinctions often require tailored technical implementations.

As the ecosystem expands, we can expect each issuer—or at minimum, each regulated geography—to require bespoke blockchain infrastructure.
This will allow issuers to: 

• Align closely with local compliance frameworks
• Minimize operational friction with region-specific banking and custody systems 
• Unlock jurisdiction-specific economic opportunities 

The implication? Without seamless interoperability across these networks, the vision of stablecoins as a unified medium for global payments will remain out of reach.

The Tradeoff: U.S. laws prioritize consumer safeguards and system stability at the cost of design flexibility (e.g. no interest, freeze/burn required). EU laws strike a different balance, but both signal mainstream acceptance.

Operational Challenges

• Scaling fiat on/off-ramps across jurisdictions is complex.
• Bank partnerships, custody infrastructure, and user protection vary significantly across regulatory environments.
• Varying regulatory regimes create the need for jurisdiction-specific systems.

See: Stablecoin Standard - Retail Payments and Interoperability, an article co-written by Stellar and the Axelar Foundation. 

Market-Specific User Preferences

One blockchain does not fit all. Preferences for blockchain networks vary widely by geography and use case:

• Solana plays a significant role in the Asia-Pacific blockchain ecosystem, supported by its ultra-low transaction fees and strong developer engagement. In this region, Solana accounts for a substantial portion of blockchain activity, with 100 million active addresses out of 220 million globally as of September 2024, highlighting its prominence among users and developers. (Everstake, 2024)
  
  
• Ethereum remains favored in North America and Western Europe, especially among institutional players and DeFi developers due to its perceived security and network effects (DataIntello, 2025)
  
  
• BNB Chain and Polygon see more retail activity in Latin America and Africa, largely driven by exchange partnerships and lower gas costs. (Coinfomania, 2025)

In this environment, interoperability isn’t optional—it’s essential. The ability to issue, move, and redeem stablecoins across any blockchain, regardless of the originating jurisdiction, offers three major advantages:

1. Adoption: Users can receive funds on the chain they already use—no need to learn new wallets or switch ecosystems.
   
   
2. Stickiness: Once financial services (like lending or tokenized investments) are offered natively on preferred chains, users are less likely to churn or bridge elsewhere.
   
   
3. Trust: Fungibility across chains, enabled by infrastructure like Circle’s CCTP or Axelar’s ITS, removes confusion around ‘wrapped’ versions and guarantees redemption parity. This builds institutional and retail confidence in stablecoin usability across contexts.

Region-Specific Regulatory Requirements

On top of this existing diversity established by user preference and regional business ties, jurisdiction-specific regulation will reinforce chain fragmentation. For example:

• The EU’s MiCA regime may require stablecoins to be issued on MiCA-compliant blockchains that allow transaction freezing and on-chain disclosure.
  
  
• U.S. stablecoin laws (like the GENIUS Act) may enforce stringent reserve disclosures and require support for federal enforcement triggers—requiring systems that can support those controls.
  

As regulators codify their expectations and financial institutions go multichain to comply, interoperability across multiple blockchain systems becomes the glue that connects global stablecoin access, utility and liquidity.

The diversity of legal regimes, technical requirements, and product opportunities across geographies creates a fragmented environment. Interoperability is not a technical "nice to have"—it’s a strategic necessity for global stablecoin success.

Here’s why:

• Compliance localization: As regulators demand on-chain enforcement of local laws, issuers may need jurisdiction-specific implementations. Without interoperability, this fragments liquidity and undermines user experience.
  
  
• Issuer diversification: Different issuers will adopt different chains, languages, and verification schemes depending on their region and business model. Interoperability ensures the stablecoins they issue can still interact and settle across networks.
  
  
• Infrastructure modularity: Financial institutions need flexible tooling to plug into existing systems. Interoperability enables asset portability and integration with localized wallets, remittance rails and merchant solutions.
  
  

As the Monetary Authority of Singapore notes in its Interlinking Networks technical paper, seamless cross-network settlement hinges on standardizing message formats, state validation and trust-minimized communication protocols. (Monetary Authority of Singapore, 2023)

Opportunities

Under MiCA (EU), the GENIUS Act, and the STABLE Act (U.S.), issuers are prohibited from offering interest or yield on stablecoins. This prohibition serves multiple policy objectives:

• Prevent stablecoins from mimicking deposit accounts.
• Avoid overlap with regulated investment products.
• Protect consumers from misleading “risk-free” returns.
• Ensure stablecoins are used exclusively for payments and settlement.

These restrictions permit stablecoins to operate as pure payment infrastructure: Fast, transparent, programmable money for on-chain settlement, fiat on/off ramps, and global value transfer—without introducing systemic risk. 

Regulations in other regions are evolving, and some may allow interest-bearing stablecoins explicitly, or by omission. Issuers may choose to take advantage of those opportunities, or to focus on using stablecoins as a market entry point from which to expand ancillary offerings. 

Expanding Offerings

Stablecoins are no longer just about fast settlement–they’re becoming an on-ramp to full-sepctrum digital finance.

Issuers who begin with a stablecoin can quickly expand into adjacent financial products, especially in emerging markets and fintech-forward economies where traditional financial systems are less mature. This evolution creates ‘stickiness’: users stay for the added utility, not just the transfer speed and cheap transactions.

Key product categories include:

• Lending
  Stabelcoin issuers can extend credit against on-chain collateral or even underwrite loans based on on-chain transaction history. This unlocks credit for new users, particularly in remittance-heavy corridors. (Reflexivity Research, 2025)
  
  
• Wealth Management
  From automated savings plans to access to diversified tokenized funds, issuers can offer retail investors exposure to portfolios that were once out of reach. In MiCA-compliant zones, for example, stablecoins can be tied to yield-bearing assets such as short-term EU sovereign debt. (Innreg, 2025)
  
  
• New Financial Products (e.g., tokenized funds)
  Tokenized funds denominated in stablecoins lower the barriers to entry and create composable financial ecosystems. These offerings can be tailored by jurisdiction—interest-bearing in the EU, principal-protected in the US—while still using stablecoins as the native unit of account. (Boston Fed, 2025)

This product expansion strategy does more than generate revenue: It embeds stablecoins deeper into the financial lives of users, making them the core infrastructure of everyday money movement, saving and investing.

Axelar's Interchain Token Service (ITS): Technical Architecture 

Axelar provides a unified security and interoperability layer for stablecoin issuers operating across blockchain environments. Its architecture combines proven security primitives with the adaptability required for regulated financial applications. This infrastructure enables innovative products like Axelar ITS, a toolset for cost-effectively issuing and managing stablecoins and other tokens across multiple blockchain environments.

Key features include: 

• Proof-of-stake consensus, aligned with leading networks like Ethereum and Cosmos, and supported by a globally distributed set of 75 validators—ensuring resilience and decentralization.
  
  
• Customizable permissioned Verifiers: Issuers and institutions can configure subsets of identifiable verifiers for use cases requiring enhanced compliance controls—particularly useful in regulated contexts. This is enabled via the Interchain Amplifier.
• Hub-and-spoke topology: Designed to localize risk and accelerate remediation in the event of failure or compromise in a connected chain.
  
  
• Open-source codebase: Axelar’s infrastructure is fully transparent, audit-verified, and verifiably tamper-resistant via public blockchain records—eliminating reliance on proprietary middleware.
  
  
• Battle-tested uptime: Axelar boasts the longest incident-free record among cross-chain messaging protocols, with a robust audit trail and active monitoring across all connected networks.

See: Axelar: Security,  Axelar: Interchain Token Service,  Axelar: What is the Interchain Amplifier?

A Note on Future-Proofing

As stablecoins continue to grow, interoperability will be the key to making them truly effective in cross-border payments. Axelar’s open-source, permissionless infrastructure allows stablecoins to move easily across different regulatory and technological systems. Unlike proprietary solutions that lock issuers into specific vendors, Axelar’s open-source design provides the flexibility to adapt as rules and market conditions change.

Axelar’s Amplifier feature makes it simple to integrate any blockchain or verification method, meeting the specific compliance needs of each region. This means that institutions can stay agile, responding quickly to new regulatory requirements.

In addition, Axelar’s Interchain Token Service (ITS) is a no-code solution that speeds up deployment by enabling stablecoins to launch across 77 public blockchain networks. This makes it easier for issuers to scale their operations while staying compliant.

With Axelar, institutions can build the future of stablecoin interoperability—without being locked into a single vendor—paving the way for faster, more efficient global payments.

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