The "Game of Thrones" of stablecoin cross-border payments: The ideals are abundant, but is the "last mile" still a stark reality?

In the middle of 2025, the debate on whether stablecoins can subvert traditional cross-border payments has not subsided, but has entered a more intense “deep water area” with the initial implementation of the regulatory framework and the exploration of the application of the real economy.

Recently, the fintech unicorn Airwallex and the head of the transportation giant Uber had a rare confrontation on this issue, bringing two completely different viewpoints to the forefront: one side is a pragmatic practitioner with years of experience in payments, pointing out the cost black hole of stablecoins in the real world; the other side is an optimistic advocate embracing cutting-edge technology, optimistic about its potential as a global transaction lubricant.

The core of this debate is no longer the grand narrative of “whether crypto technology is the future,” but rather a probing question that gets to the heart of the matter: after stripping away all technological glamour, what problems does the stablecoin actually solve for whom? Is the efficiency revolution it claims sufficient to bridge the “last mile” of the payout gap?

Pragmatic Cold Water: Jack Zhang and the “Last Mile” Redemption Dilemma

“Investors keep asking me how stablecoins can reduce foreign exchange costs, and my answer is that in the vast majority of mainstream scenarios, they cannot.” This statement by Jack Zhang, co-founder and CEO of Airwallex, on the X platform, felt like a cold splash of water thrown onto a market that holds overly romantic fantasies about stablecoin payments.

His logic is simple yet deadly: suppose a user needs to transfer 10,000 USD from the United States to Germany, and the recipient ultimately needs to receive the equivalent amount in euros in their Deutsche Bank account. The traditional route is for banks to complete this through the SWIFT network and correspondent banking system, with costs mainly reflected in the exchange rate spread and wire transfer fees.

The stablecoin path is theoretically like this:

1. On-Ramp: Users in the United States exchange $10,000 for 10,000 USDC or USDT. This step may incur transaction fees or slight price differences.

2. On-chain transfer: Send 10,000 stablecoins to the recipient’s wallet via a blockchain network (such as Ethereum L2 or Solana). The transaction fee for this step is very low, and the speed is extremely fast, available 7x24 hours.

3. Off-Ramp: The recipient sells 10,000 USDC/USDT on a compliant exchange or OTC platform in Europe, exchanges it for euros, and withdraws it to their bank account.

Jack Zhang’s questioning points directly to the third step, which is also the most critical “last mile.” He sharply pointed out: “The conversion cost from stablecoin to receiving currency is far higher than that of the foreign exchange interbank market.”

The “conversion cost” here is a composite concept that includes at least:

Exchange/OTC Spread: The trading pairs of stablecoins with euros (e.g., USDC/EUR) usually have liquidity, depth, and bid-ask spreads that are worse than those of the interbank foreign exchange market’s USD/EUR. For large transactions, slippage costs can rise dramatically.

Platform fees: Whether it is trading fees or withdrawal fees, they are an expense that cannot be ignored.

Compliance and operational costs: The recipient needs to have and operate a cryptocurrency wallet and exchange account, and meet the corresponding KYC/AML (Know Your Customer/Anti-Money Laundering) requirements. This represents implicit time and learning costs for ordinary users or corporate finance departments that are not familiar with the crypto world.

Jack Zhang’s epilogue that “crypto hasn’t seen any (large-scale) use cases in the last 15 years” may seem a little categorical, but it accurately reflects the dilemma from a practitioner’s perspective: the huge superiority of on-chain efficiency is offset by the huge friction of off-chain connections to the real world. As long as the final recipient needs sovereign fiat currency in its bank account, stablecoins must cross this gap, and every time they cross, there is a cost.

The Optimist’s Vision: Dara Khosrowshahi and the New Paradigm of Global Trading

In stark contrast to Jack Zhang’s caution, Uber CEO Dara Khosrowshahi stated that Bitcoin has become “a verified commodity” and believes that “stablecoins can effectively facilitate international transactions.”

Uber has a global presence, and the payment challenges it faces are typical: high-frequency, small-amount, multi-currency driver commissions and passenger payment settlements. The traditional banking system is cumbersome, expensive, and slow to process such payments. A lump sum of US$15 paid to Kenyan drivers can be eroded by fees via traditional wire transfers, and the arrival time is long.

From this perspective, the advantages of stablecoins are almost tailor-made for this type of scenario:

Cost Revolution: Gas fees as low as a few cents or even lower make cross-border micropayments shift from “uneconomical” to “feasible,” which is disruptive for the gig economy, content creator economy, and small-scale cross-border e-commerce purchasing.

Efficiency Revolution: 24/7, second-level settlement, completely eliminates delays caused by bank operating hours, holidays, and intermediary processing, greatly enhancing the efficiency of global fund flow. For enterprises that require high-frequency management of global cash flow, this means lower capital occupation costs and greater financial flexibility.

Programmability: Based on smart contracts, it can implement automated, condition-triggered complex payment logic, such as “automatically paying the supplier upon delivery of goods and confirmation by IoT devices”. This process is complicated and costly to implement in traditional financial systems.

Khosrowshahi’s perspective represents the vast groups and scenarios that are “underserved” by the existing financial system. They are willing to learn and adapt to new operating processes in order to achieve ultimate efficiency and cost advantages. For them, the friction of the “last mile” certainly exists, but the overall friction of traditional payments may be even greater.

The reality of 2025: coexistence, infiltration rather than complete replacement

After nearly a year of market evolution, particularly with the full implementation of the European Union’s Markets in Crypto-Assets Regulation (MiCA) and the increasing clarity of the regulatory path for payment stablecoins in the United States, the profile of stablecoin payments is no longer vague. It has not launched a total attack on SWIFT as early prophets predicted and replaced it; instead, it shows a trend of “precise penetration, with scenarios being king.”

B2B settlement and corporate treasury management are the main battlegrounds: The most successful application of stablecoins is not C2C personal remittances, but B2B. Stablecoins are used by multinationals to transfer funds between internal subsidiaries or to pay global suppliers who also accept stablecoins. In this “closed-loop” or “semi-closed-loop” system, funds stay on the chain for as long as possible, avoiding frequent On/Off-Ramp operations, thereby maximizing on-chain efficiency and avoiding the cost problem of “last mile”.

The “sweet spot” of emerging markets and special lanes: In regions where currencies are unstable, exchange controls are strict, or banking services are inadequate, such as some countries in Latin America, Africa, and Southeast Asia, stablecoins (primarily USD stablecoins) have become the de facto hard currency and mainstream payment option. Here, citizens and merchants have long been accustomed to P2P (peer-to-peer) or fiat currency exchange through local OTC merchants, and the inherent friction costs are even lower than those of an imperfect official financial system. Stablecoins open the door to the global digital economy for them.

‘Dual-track’ integration of fintech companies: While the CEO of a payments company like Airwallex has publicly expressed skepticism, the underlying business logic dictates that it cannot ignore this trend. The common practice in the industry is to adopt a “dual-track” strategy: while continuing to optimize traditional FX channels, integrate stablecoins into the platform as a new, optional payment/settlement “track”. Clients can choose the optimal path based on their own needs, cost sensitivity, and counterparty acceptance. The competition of the future will be who can better shield the complexity of the underlying technology and provide users with seamless and intelligent routing.

Back to the original question: Can stablecoins replace traditional cross-border payments?

The answer is becoming increasingly clear today in 2025: it cannot be done in the short term, but in the long term, it is about integration and symbiosis.

Jack Zhang’s skepticism is valid, as he points out the fundamental obstacles that stablecoins face when integrating into the existing fiat currency world. The cost and experience of the “last mile” are the “line of life and death” that determine whether they can be accepted by the mainstream public and businesses.

However, Dara Khosrowshahi’s optimism is not unfounded; he sees an incremental market driven by efficiency and cost, a blue ocean that traditional financial services have failed to fully meet.

Stablecoin payments and traditional cross-border payments are not a zero-sum game of you win, I lose. It’s more like a brand new high-speed railway that has emerged on the ancient financial continent, adopting different technical standards. It will not make all the old roads disappear, but will permanently change people’s expectations of speed, cost, and possibilities.

In the future, the real winners will be those who can build the most convenient “transfer stations” for customers, allowing them to switch freely between traditional highways and new railways, reaching their destinations at the lowest cost and with the highest efficiency, forming a “super comprehensive transportation hub.” This profound transformation in the global flow of value has only just begun.

This article represents only the personal views of the author and does not represent the position or views of this platform. This article is for information sharing only and does not constitute any investment advice to anyone.

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