The breakthrough of stablecoin C2C cross-border remittances: from high fees to real-time settlement

This is not the end of payments, but a new beginning for on-chain finance.

A True Story

Around 2010, Mexican engineer Julio working in San Francisco borrowed $300 from a friend — just to send school supplies home for his daughter. The reason was simple: high remittance fees made him hesitant.

This story inspired the entrepreneurial vision of the founders of Bitso. They discovered an absurd phenomenon: video calls on mobile phones are basically free, but cross-border transfers are outrageously expensive.

This is a true reflection of the current global C2C (person-to-person) cross-border remittance landscape.

How Expensive Are Traditional Remittances?

2024 data shows that remittances received by low- and middle-income countries reach $685 billion. Yet, this channel is disappointing:

Average fee rate 4%-6%

• Remittance of $200: about 6.3% cost
• Remittance of $500: about 4.3% cost
• Bank channels are the most expensive, up to 12.66%

This doesn’t include hidden costs. Traditional remittance companies often offer exchange rates significantly worse than market rates, with forex markups in emerging markets accounting for up to 80% of total costs.

Stablecoins Are Changing All This

What if the same $200 transfer is done via stablecoin?

Cost reduced by 92% — from 12.66% down to just over 1%

Specific cases:

• BCRemit (serving Filipino overseas workers): total transfer costs below 1%
• Sling Money: charges only up to 0.1% on deposits, 100 times cheaper than banks’ 13%
• Settlement speed: less than 1 second, compared to 1-5 days via traditional methods

Three Key Pain Points in C2C Remittance

1. Last mile challenge

Stablecoins move quickly on-chain, but landing in cash and local economies is the real test. Globally, a quarter of people still mainly use cash, often excluded from the “pure digital economy.”

2. Local currency gap

Sending USD stablecoins from the US is easy, but recipients in the Philippines need pesos, as do those in Argentina. Currency exchange costs and liquidity become issues.

3. Recipient side overlooked

Traditional remittance providers charge senders, leaving recipients in a passive position — only able to receive passively, with limited financial services.

New Approaches by the Big Three Stablecoin Players

MoneyGram: Reshaping the Recipient Experience

With 500,000 offline locations and 85 years of history, MoneyGram is “re-entrepreneuring” through stablecoins.

Key moves:

• Receiver-Side Wallet: allows recipients to freely hold, withdraw, or use funds, rather than needing to cash out immediately
• MoneyGram Ramps: becoming a two-way bridge between cash and stablecoins — users can convert cash to stablecoins at any global location, and vice versa

CEO Anthony Soohoo likens the current crypto industry to a “California motel” — “You can check in anytime, but you can never leave.” MoneyGram aims to break this cycle, enabling assets to truly “go in and out.”

The choice of Colombia as the initial launch site is typical:

• Remittance inflows are 22 times outflows (highly dependent on remittances)
• Young population, widespread smartphone use
• Local currency volatility, requiring stable assets

Western Union: Building Its Own Stablecoin Ecosystem

The 150-year-old remittance giant is taking more aggressive steps — launching its own stablecoin USDPT (scheduled for mid-2026).

The logic behind this:

• Real-time settlement advantage: eliminates the need for pre-funded accounts, with funds settled on-chain instantly
• Liquidity release: no need to lock in cash beforehand, greatly improving financial institutions’ turnover efficiency
• Risk management upgrade: in countries with volatile currencies, stablecoins can “lock in value” first, then convert when needed

Western Union’s innovation involves partnering with Rain (a stablecoin infrastructure platform) to launch a stablecoin payment card. An Argentine user, for example, can:

• Hold USDPT to hedge against inflation
• Use Rain Card for local spending
• Even access “buy now, pay later” lending services

Bitso’s Breakthrough: From $80 Billion in Payments to Local Currency Stablecoins

As Latin America’s first crypto unicorn, Bitso handles 10% of US-Mexico remittances, with an annual total of $80 billion.

What’s their secret?

1. Solving Liquidity Challenges for Payment Service Providers

In traditional models, PSPs need to wait days to receive funds — collecting money first, then doing forex conversions and bank settlements once they reach a certain scale.

Bitso’s approach: instant conversion to stablecoins (USDC or USDT), directly sent to merchants, completely changing PSP cash flow.

2. 24/7 Settlement

Traditional remittance companies need to process remittances by Thursday to reserve operating funds for the weekend, occupying 3 days of working capital. Bitso’s stablecoin channels:

• Can send anytime
• Can settle anytime
• Significantly reduce capital lock-up

3. Local currency stablecoins are the key breakthrough

Bitso’s launched stablecoins MXNB (Mexican Peso) and BRL1 (Brazilian Real), solving a fundamental issue:

People tend to price local markets in their local currency.

Why is this important?

• Mexican banks provide credit in pesos, and people earn and repay loans in pesos
• On-chain liquidity is unified, improving forex market pricing efficiency
• Fintech companies bypass complex central bank payment systems, innovating directly

Beyond Payments: A New Era of On-Chain Finance

The deeper significance of these initiatives goes beyond “cheap + fast”:

A complete experience for an Argentine user

• Receives USDPT, retains USD positions to hedge inflation
• Uses payment card to spend local pesos
• When needing a loan, accesses cheaper on-chain rates than local banks
• Remains entirely on-chain, no need to withdraw to traditional banks

This creates an “ecosystem of multiple benefits”:

• Issuers distribute stablecoins
• Users access diverse financial services
• Merchants enjoy efficient payment experiences

Market Status and Outlook

Current Barriers

1. Tax uncertainty: many countries have yet to clarify tax rules for stablecoins
2. Fragmented liquidity: liquidity is dispersed, exchange efficiency is insufficient
3. User education: ordinary people are still unfamiliar with stablecoins

Future Trends

Not just USD dominance anymore

Currently, almost 100% of stablecoins are USD-pegged, but this won’t last. As tokenization expands, demand for local currency stablecoins will explode.

The next 5-10 years could see:

• More exchanges issuing regional stablecoins
• Lending, wealth management, credit card scenarios moving on-chain
• Users truly staying on-chain, rather than using stablecoins as mere transit

This Is Just the Beginning

From a technological history perspective, every industry explosion has come from finding a “killer app.” Personal computers had spreadsheets, the internet had browsers, mobile internet had Uber.

Stablecoins are becoming the killer app of the crypto industry, with influence extending from payments into all layers of finance.

But it’s not just about cost optimization — it’s a breakthrough in inclusive finance. For those who cannot access traditional banking, stablecoins open a new window — low-cost, instant, reliable.

As the founder of Bitso said, this is a “wheel of fate.” Traditional finance still has many tracks ripe for disruption: agent banking, credit card processing, global payments, stock settlement…

We are just getting started.

The C2C value of stablecoins far exceeds cross-border remittances themselves; it opens a new era of on-chain financial services.