The internet has made information free and global. So why is transferring money still so difficult and expensive?
The early internet promised a future where anyone could publish, build, or trade without permission. Protocols like email and the World Wide Web were open and neutral, enabling creativity, innovation, and entrepreneurship to flourish. But along the way, it veered off course.
Today, the global financial system resembles a patchwork of corporate networks: centralized, closed, and predatory. Behind every transaction lies a complex web of intermediaries, akin to a Rube Goldberg machine, such as point-of-sale systems, payment processors, acquiring banks, issuing banks, local banks, correspondent banks, foreign exchange platforms, and credit card networks. Each institution takes a cut, adds delays, and imposes rules. These networks impose unnecessary taxes on commercial activities and stifle innovation. They turn what should be neutral channels into high-friction bottlenecks.
Stablecoins—cryptocurrencies pegged to stable assets like the US dollar—offer an alternative, a reset—a way to bring the internet’s original vision to currency.
The Disruptive Opportunity of Stablecoins
The current payment system was not built for the internet—it was built for a world filled with fee-charging intermediaries (these intermediaries once played a role in managing local cooperation, fraud prevention, and operations). Even today, international money transfer fees can reach up to 10% (in September 2024, the average fee for a $200 transfer was 6.62%). These are not merely frictions—they are effectively regressive taxes imposed on some of the world’s poorest workers (PANews Note: Generally, a regressive tax is one where the tax rate is the same regardless of the taxpayer’s income or wealth, resulting in higher rates for those with lower incomes and lower rates for those with higher incomes. The greater the disparity in income or wealth among taxpayers, the more pronounced this phenomenon becomes, hence the term “regressive tax”). The current system is slow, opaque, and exclusionary, leaving billions of people underserved or completely cut off from the global financial system.
For many businesses, traditional payment methods are extremely inefficient. Stablecoins can significantly improve this situation. B2B payments from Mexico to Vietnam typically take 3 to 7 days to settle, with transaction costs ranging from $14 to $150 per $1,000 transaction, involving up to five intermediaries, each of which charges a certain percentage in fees. Stablecoins can bypass traditional systems like the international SWIFT network and their associated clearing and settlement processes, making such transactions nearly free and instantaneous.
This is not just theoretical—it is already happening. Currently, companies like SpaceX are using stablecoins to manage their corporate funds (including repatriating funds from countries like Argentina and Nigeria, where local currencies are highly volatile). Companies like ScaleAI are using stablecoins to pay global employees faster and more cheaply. Meanwhile, in the B2C (business-to-consumer) space, Stripe is the first service provider to widely offer cryptocurrency payments, charging a 1.5% commission—half that of traditional payment methods. This could significantly boost profit margins for certain businesses: as a16z partner Sam Broner pointed out, for businesses with very low profit margins, such as grocery stores, a 1.5% increase in profit margin could double net income. (And in the highly competitive, blockchain-based market, transaction fees are expected to drop even further.)
Unlike the old financial system, which developed in isolation, stablecoins are inherently global. They operate on blockchain: anyone can build an open, programmable network. There’s no need to negotiate with dozens of cross-border banks—just connect to the network. People have recognized these advantages. In 2024, stablecoin transaction volumes reached $15.6 trillion, on par with Visa’s transaction volume. While this figure primarily represents capital flows (rather than retail payments), its scale still indicates that we are on the brink of a transformation in financial infrastructure—one that does not rely on piecing together 20th-century systems.
Instead, we can build something entirely new—something truly internet-native, or as Stripe puts it, the “room-temperature superconductor of financial services,” where the goal is not lossless energy transmission but lossless value transmission.
The “WhatsApp moment” for currency
Stablecoins give us our first real opportunity to make currency open, instant, and borderless, much like email revolutionized communication.
Consider the evolution of text messaging. Before apps like WhatsApp, sending a cross-border text message meant paying 30 cents per message. And if the message actually delivered, that was considered lucky. Then, internet-native communication apps emerged: instant, global, and free. Today’s payment methods are like messaging in 2008: divided by borders, burdened by intermediaries, and controlled by “gatekeepers.”
Stablecoins offer a completely new alternative. They don’t cobble together clunky, expensive, and outdated systems; instead, they flow seamlessly across global blockchains. These systems are programmable, composable, and designed for cross-border scalability.
Stablecoins have significantly reduced remittance costs: sending $200 from the US to Colombia via traditional methods costs $12.13; using stablecoins, the fee is just $0.01. (Fees for converting stablecoins into local currency range from 0-5%, and prices continue to decline due to increased competition.)
Just as WhatsApp disrupted expensive international calls, blockchain payments and stablecoins are transforming global remittances.
Regulation: From Bottleneck to Breakthrough
It is easy to view regulation as an obstacle, but wise legislation is the key to solving problems.
Establishing clear rules for stablecoins and the crypto market could ultimately enable these technologies to move beyond sandboxes and toward broader adoption. For years, DeFi has been trapped in a closed, circular, “coin-to-coin” economy. Not because these tools are useless, but because regulators have made it difficult for them to integrate into the traditional financial system.
This situation is changing. Policy makers are actively developing rules to recognize and regulate stablecoins to maintain U.S. competitiveness, protect consumer rights, and foster innovation. Thoughtful regulation—such as a framework distinguishing network tokens from security tokens—can deter bad actors while providing clear guidance for compliant entities. In fact, an upcoming bill clarifying these regulatory rules could pave the way for broader adoption and integration into the global financial system.
Building Public Goods That Benefit Everyone
Traditional finance is built on private, closed networks. But the internet demonstrated the power of open protocols—such as TCP/IP and email—to drive global collaboration and innovation.
Blockchains are the internet’s native financial layer. They combine the composability of public protocols with the economic power of private enterprises. They offer trusted neutrality, auditability, and programmability. Adding stablecoins to this foundation yields something we’ve never truly had before: an open monetary infrastructure.
Imagine it as a public highway system. Private companies can still build vehicles, conduct business, and create roadside attractions. But the roads themselves are neutral and open to everyone.
The role of blockchain networks and stablecoins goes far beyond reducing fees. They are giving rise to new categories of software:
· Programmatic payments between machines: AI-driven markets automatically match transactions for computing resources and other services.
· Micropayments for media, music, and AI contributions: Simply set some budget rules, then let a “smart” wallet handle the payments.
· Transparent payments with full audit trails: Use these systems to track government spending.
· Global trade without cumbersome intermediaries: Settle international transactions instantly at extremely low costs—this is already emerging.
The era of blockchain networks and stablecoins has arrived: Technology, market demand, and political will are converging to make these applications a reality. A stablecoin bill may be passed this year, and regulators are weighing frameworks that balance risk with appropriate regulation. Just as early internet startups flourished once it became clear they wouldn’t be shut down by telecom companies or copyright lawyers, cryptocurrency is ready to cross the divide from financial experiment to critical infrastructure, with stablecoins leading the way.
There is no need to patch up old systems; we can instead rebuild better ones.
