Key Takeaways
- The first crypto remittances used Bitcoin to power international money transfers.
- Today, however, stablecoins have emerged as the crypto rail of choice for remittances.
- As the concept gathers steam, banks, fintechs and major payment providers are integrating stablecoins into cross-border flows.
In recent years, cryptocurrency transfers, mostly using Bitcoin or stablecoins like USDT, have emerged as an increasingly popular alternative to traditional remittances.
Initially, countries including Argentina and Venezuela led the way. But evolving technology usage in the Global South and new offerings from global remittance providers are rapidly transforming the way money moves around the world.
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Digital Solutions to Money Transfer Challenges
For many countries in the Global South, inbound remittances account for over 20% of gross domestic product (GDP). Yet, ironically, some of the countries that are most reliant on remittances are the most expensive to send money to.
In 2015, the United Nations made lowering the cost of remittances one of its Sustainable Development Goals, aiming to eliminate corridors with costs higher than 5% by 2030.
While there has been some progress, in Q3 2024, the cost of sending $200 from G20 countries still stood at 6.67%.
To achieve its goal, the UN supports regulatory reforms that allow more non-bank actors, like mobile money operators and fintechs, to compete with traditional money transfer companies.
It also advocates for the greater adoption of digital solutions, including mobile wallets and stablecoins as ways to bypass intermediaries and lower costs.
Early Adoption of Crypto Transfers
As Bitcoin started to break out of the cypherpunk niche in the early 2010s, proponents argued that it could be used to bypass high fees and slow settlement times in traditional remittance systems.
Early peer-to-peer Bitcoin exchanges facilitated various payment channels, including cash and direct bank transfer. But an internet connection and a degree of digital literacy were inevitably preconditions for accepting Bitcoin transfers.
To solve this challenge, solutions like BitPesa in Kenya and Rebit.ph in the Philippines emerged.
These services automated the crypto-to-fiat conversion and processed payouts via mobile money (BitPesa), bank transfer, or cash pickup (Rebit).
Bitcoin-based remittance solutions quickly rose to prominence in certain corridors. For example, in 2016, it was estimated that BTC powered 20% of remittances flowing from South Korea to the Philippines.
Stablecoins Enter the Picture
Following the launch of USDT in 2014, stablecoins started to eclipse Bitcoin as the crypto rail of choice for remittances.
Compared to Bitcoin, dollar-pegged stablecoins are considerably less volatile. And thanks to high-throughput modern blockchains like Solana, Tron and various Ethereum Layer 2s, stablecoin transfers can also be much cheaper.
Mirroring the trajectory of Bitcoin remittances, the earliest adopters transferred peer-to-peer and used crypto exchanges to handle fiat conversion.
In countries like Venezuela and Argentina, which suffer from high inflation, parallel stablecoin economies emerged as recipients opted to retain USDT rather than convert it to rapidly devaluing local currency.
Fintech Platforms Scale
The late 2010s saw new stablecoins crop up to rival Tether’s. Most notably, Circle’s USDC was positioned as a more compliant alternative with a suite of APIs to promote the development of new use cases.
With these, a host of fintech solutions emerged to scale stablecoin remittances and bridge crypto platforms with established payment systems.
As adoption has grown, remittance flows have become more automated, and increasingly, the crypto aspect is abstracted away entirely.
Fintech startups like Stables, Yellow Card and Onafriq use stablecoins as a cross-border settlement layer. But end users only need to interact with fiat channels.
Building Crypto Remittance Rails
Around the world, crypto remittances require off-ramp solutions catered to local preferences.
Whether it’s M-Pesa in Kenya, PIX in Brazil, or Paytm in India, crypto remittance rails need to integrate with local payment systems. To create these end-to-end cross-border services, stablecoin issuers have tapped diverse technology partners, and increasingly, legacy payment providers.
For instance, in April, Circle debuted the Circle Payment Network, a global platform that uses USDC to power cross-border money transfers.
Early participants in the network include fintechs like ReDotPay and Alfred Pay, which provide international money transfer services for both business-to-business payments and personal remittances.
The new platform expands USDC’s reach to new fiat offramps. For example, Alfred Pay offers disbursements via PIX in Brazil or SPEI in Mexico.
Institutional Support
In 2025, fintechs aren’t the only ones building stablecoin infrastructure.
Global card schemes now offer their own support for a growing range of stablecoins, with both Visa and Mastercard developing cross-border settlement solutions that further embed the technology in international payment flows.
More significantly for remittances, a growing number of banks are also exploring the technology.
While JPMorgan was the first bank to issue its own stablecoin in 2019, Santander, Société Générale, Bank of America and Citigroup are among those now considering similar initiatives.
In the first wave of adoption, bank-issued stablecoins have mostly been used to facilitate wholesale transactions between institutions. But as the concept gathers steam, it holds potential for remittances, too.
Traditionally, banks have charged significantly more than money transmitters for small international transfers, essentially pricing them out of the remittance market. But as they develop their own stablecoin rails, banks may be able to offer customers much more competitive prices.
Even Swift, which is often depicted as the system with the most to lose from rising stablecoin adoption, has started to embrace crypto in its own way.
Since 2024, the organization has been working to integrate stablecoins, Central Bank Digital Currencies (CBDCs) and various tokenized assets into its global bank network.
At the same time, Progmat and Datachain have launched Project Pax — an initiative to utilize Swift’s existing API framework for a cross-border stablecoin transfer platform.
Obstacles to Further Adoption
Despite increasingly well-connected stablecoin infrastructure and a growing number of localized off-ramp solutions, there are still obstacles to the greater adoption of crypto remittances.
In less developed countries, especially in rural areas, internet access remains limited, and smartphone penetration is low. Because of this, there is a misbalance in many remittance corridors, where the first leg is almost entirely digitalized, but the final leg still requires cash.
Because cash incurs additional handling costs, usually requiring local agents to administer disbursements, it drives up the cost of sending money from one country to another.
Even in countries with more digital and financial inclusion, crypto remittance providers often struggle to access the necessary banking services.
As regulatory frameworks around the world mature, companies that handle crypto are slowly being welcomed into the financial mainstream. But progress remains slow and friction between different regimes continues to hamper cross-border growth.
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