Stablecoins are emerging as a bridge between fragmented domestic payment networks, aiming to solve cross-border settlement delays.
The promise of instantaneous global commerce is currently hitting a structural wall. While domestic real-time payment (RTP) networks like Brazil’s Pix, India’s UPI, Singapore’s PayNow, and Europe’s SEPA Instant have successfully compressed settlement times within their respective borders, the international leg of these transactions remains tethered to the legacy correspondent banking system. This creates a persistent friction point where cross-border movement is significantly slower and more expensive than domestic transfers. A new architectural model is attempting to solve this by using stablecoins as an invisible middleware layer to bridge these disparate local rails.
The emerging model, often referred to in crypto-native circles as a "stablecoin sandwich," does not seek to replace domestic payment systems. Instead, it inserts a blockchain-based stablecoin layer between them. In this workflow, funds are off-ramped from a local bank account or digital wallet into a stablecoin, which then traverses the blockchain to a destination jurisdiction. Upon arrival, the stablecoin is off-ramped into the local RTP network of the recipient. By bypassing the traditional multi-hop correspondent banking chain, this approach aims to reduce both settlement latency and the capital requirements associated with pre-funded accounts.
This infrastructure shift is gaining momentum. On May 4, Tetra Digital Group launched a payment stablecoin specifically engineered to facilitate this type of cross-border settlement. Similarly, Visa has expanded its partnership with the Stripe-owned infrastructure platform Bridge to enable stablecoin-linked cards across more than 100 countries. These moves suggest that the competition for the "orchestration layer" of global payments is intensifying, pitting crypto-native infrastructure providers against traditional card networks and banking institutions.
Despite the technological efficiency, adoption remains in the early stages. According to March data from PYMNTS Intelligence, while 42% of middle-market companies have discussed stablecoin integration, only 13% have moved to actual implementation. As Tanner Taddeo, CEO of Stable Sea, noted, corporate treasury departments are inherently conservative. They are not prioritizing innovation for its own sake but are instead focused on de-risking existing operations. Trust in this context is not a given; it is earned through regulatory compliance and infrastructure stability.
This institutional hesitation is compounded by the fact that the regulatory environment is far from uniform. On May 3, Brazil implemented a ban prohibiting electronic foreign exchange (eFX) companies from utilizing cryptocurrencies to settle overseas remittances. Such regulatory shifts demonstrate that the path to widespread adoption is subject to local policy constraints that can abruptly alter the viability of specific cross-border corridors. For firms evaluating these tools, the regulatory risk is as significant as the technical risk.
For those looking at the sector, the primary risk remains the security of the bridge itself. Hacks targeting digital asset bridge solutions have historically accounted for nearly 40% of the total value lost to exploits across the entire digital asset ecosystem. This creates a substantial barrier for institutional participants who require robust, audited, and insured infrastructure. The shift toward institutional concentration—where businesses prefer to partner with established banks rather than standalone crypto wallets—is a direct response to these security concerns.
In the broader technology and industrial landscape, companies like RAMP and EFX operate within the same ecosystem of data, identity, and payment verification that this new stablecoin architecture seeks to optimize. While RAMP holds an Alpha Score of 56 and EFX sits at 30, the underlying demand for faster, more reliable cross-border data and settlement remains a common denominator. The success of stablecoin-based bridging will likely depend on whether these assets can achieve the same level of regulatory integration and institutional trust that traditional financial service providers currently enjoy.
To evaluate the viability of a stablecoin-based settlement strategy, market participants should monitor three specific catalysts. First, the development of clear regulatory frameworks regarding stablecoin reserves and custody is essential for large-scale treasury adoption. Second, the ability of these platforms to achieve interoperability with legacy banking systems without creating new points of failure will determine their long-term scalability. Finally, the emergence of institutional-grade insurance or guarantee mechanisms for bridge liquidity will be the primary indicator that the sector is moving from experimental use cases to core treasury operations.
As the market matures, the "stablecoin sandwich" model will likely face increased scrutiny regarding its reliance on decentralized infrastructure. If regulation forces these systems to become more centralized to satisfy banking requirements, the cost-benefit analysis of using stablecoins versus traditional rails may shift. For now, the focus remains on the orchestration layer, with banks, card networks, and crypto-native firms all vying to control the bridge that connects the world's fragmented instant payment networks. The winners will be those who can provide the speed of blockchain settlement with the regulatory certainty of traditional finance.
AI-drafted from named sources and checked against AlphaScala publishing rules before release. Direct quotes must match source text, low-information tables are removed, and thinner or higher-risk stories can be held for manual review.