Returning to "Payments": From Crypto to TradFi, What Is the Bigger Narrative for Stablecoins?

Yiwu and USDT, two seemingly unrelated terms, are now being discussed in the same context.

As the "world's capital of small commodities," Yiwu merchants in the past had to go through multiple intermediary banks to sell goods to the Middle East, Latin America, and Africa. This process was not only time-consuming and costly but also often faced the risk of funds being held up.

In recent years, however, the situation has been quietly changing. According to a research report by Huatai Securities, stablecoins have become one of the important tools for cross-border payments in Yiwu. Buyers can complete transfers on their mobile phones, and funds can arrive within minutes. Chainalysis even estimates that as early as 2023, the on-chain stablecoin flow in the Yiwu market had already exceeded 10 billions of dollars.

Although a follow-up investigation by 21st Century Business Herald pointed out that most Yiwu merchants have not heard of or do not understand stablecoins, and only a few support stablecoin payments, this precisely indicates that it is still in its early stages, yet already shows signs of spreading.

In other words, stablecoins are becoming the "new type of US dollar" for global small and micro traders to receive cross-border payments—payments are not only the starting point for stablecoins but also the most direct entry point for them into the global financial system.

01 From "Payments" to "Global Payments"

Since their development, stablecoins have diversified in application scenarios: some use them for DeFi mining, some to earn interest, and others as collateral assets. But behind all these uses, payments have always been their core function.

Especially in the cross-border payment scenario of "global payments," stablecoins stand in stark contrast to traditional finance.

As is well known, for a long time, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system has been the backbone of cross-border transactions. However, under modern financial demands, its inefficiency has become unsustainable—a single cross-border remittance often requires multiple intermediary banks, with cumbersome procedures and slow settlements that may take several days to complete. During this period, layered fees keep transaction costs high.

For businesses that rely on cash flow or individuals needing to remit money home, these delays and costs are almost unbearable. Simply put, although SWIFT still has global influence, it was not designed for the high-efficiency demands of the digital economy.

Against this backdrop, stablecoins offer a fast, low-cost, and borderless alternative. They are inherently low-cost, borderless, and provide real-time settlement. A cross-border transfer requires no intermediaries and can be completed in just a few minutes, with fees significantly reduced due to network differences.

For example, mainstream stablecoin transfers such as USDT/USDC on Ethereum L2 networks now cost only a few cents per transaction, which is almost negligible. This makes stablecoins a natural solution for "global payments," especially in regions like Southeast Asia and Latin America, where cross-border capital flows are active and traditional channels are inefficient, gradually becoming the mainstream choice for small payments.

More importantly, for underdeveloped or economically unstable countries, stablecoins are not just "payment tools"—they also serve as short-term stores of value. For users facing local currency depreciation, holding stablecoins means more stable purchasing power.

This dual role of "payment + hedging" is precisely why "global payment stablecoins" deserve separate discussion.

Source: "Global Payment" (remittance-type) stablecoins from imToken Web (web.token.im)

From imToken's perspective, stablecoins are no longer a tool that can be summarized by a single narrative, but rather a multi-dimensional "asset portfolio"—different users and different needs correspond to different stablecoin choices.

In this classification, "global payment stablecoins" (USDT, USDC, FDUSD, TUSD, EURC, etc.) are a distinct category specifically for cross-border transfers and value circulation. Their roles are becoming increasingly clear: they are both the fast lane for global capital flows and the "new type of US dollar" for users in volatile markets.

02 Why Can't Global Systems Avoid Stablecoins?

If "payments" are the original intention of stablecoins, then "global payments" are their most competitive application scenario. The reason is simple: stablecoins are almost inherently suited to solve the three major pain points of cross-border payments—cost, efficiency, and acceptability.

First, for payment scenarios, cost and efficiency are core.

As mentioned above, traditional cross-border remittances often require multiple intermediary banks, with timelines measured in "days" and costs easily reaching dozens of dollars. In contrast, the advantages of stablecoins are obvious. The transaction fee for a single transfer on Ethereum L2 networks is usually well below $1, and in Southeast Asia, Latin America, and other regions, they have become common tools for small cross-border payments.

According to a Keyrock report, the cost of a $200 cross-border remittance via traditional banks is about 12.66%, MTOs (Money Transfer Operators) about 5.35%, and mobile operators about 3.87%, while stablecoin platforms can reduce similar transfer costs to below 1%, greatly improving capital flow efficiency. A stablecoin transfer on Ethereum mainnet usually takes only a few seconds to confirm, and on some L2 or emerging blockchains, settlement can be even faster. This experience is on a completely different level from the T+N of the SWIFT system.

Secondly, besides efficiency and cost, whether a payment method can be widely adopted also depends on whether the recipient is willing to accept it.

This is thanks to the mutual reinforcement between the crypto market and stablecoins over the years—USDT, as the world's largest stablecoin, has long maintained a market cap at the tens of billions of dollars level and is the most widely accepted payment medium. USDC, favored by institutions for its compliance and transparency, has a high penetration rate in the European and American financial systems.

With continued penetration, in countries like Turkey, Argentina, and Nigeria, where local currencies have depreciated severely, USDT has almost become the de facto "savings currency." USDC, with its transparent reserves and compliance, attracts institutions and has high penetration in European and American markets. Although EURC is smaller in scale, it plays an irreplaceable role in cross-border settlements within Europe.

Finally, for payments, speed and cost are important, but "whether the funds are truly safe" is even more crucial.

With the implementation of the US "GENIUS Act," Hong Kong's "Stablecoin Ordinance," and pilot programs in markets such as Japan and South Korea, compliant issuance has gradually become the "passport" for stablecoins.

In the future, stablecoins that can enter the global payment system will most likely be the "whitelisted players" on the path to compliance.

In summary, the reason why stablecoins are becoming the infrastructure for "global payments" is not by chance, but because they comprehensively offer alternative advantages over traditional cross-border payments in terms of efficiency, cost, acceptability, and transparency.

03 Payments Are the Starting Point, and Also a Bigger Future

For this reason, for stablecoins that have gradually expanded their "global payment" attributes, the needs they face go far beyond the trading demands of crypto-native users and extend to a broader group:

• Individuals and enterprises with cross-border remittance or payment needs;
• Crypto traders who need to quickly transfer funds between different exchanges;
• Users facing local currency depreciation and seeking safe-haven assets such as the US dollar or euro;

From this perspective, "global payments" are both the original intention of stablecoins and their most realistic and urgent application scenario—they are not meant to overthrow the traditional banking system, but to provide a more efficient, lower-cost, and more inclusive supplementary solution, turning cross-border settlements that used to require multiple intermediary banks and several days to complete into an action that can be done in "a few minutes + a few cents."

The future trend is becoming increasingly clear. With the implementation of the US "GENIUS Act," the effectiveness of Hong Kong's "Stablecoin Ordinance," and pilot programs in Japan, South Korea, and other markets, whether for cross-border payments, corporate treasuries, or personal hedging, global payment stablecoins will become an indispensable part of the financial system.

When we look back at the experimental attempts of Yiwu merchants accepting USDT, we may find that this is not just the story of a single city, but a global microcosm—stablecoins are moving from the margins to the mainstream, from on-chain to reality, and ultimately becoming the new infrastructure for global value flows.

From this perspective, payments are the starting point for stablecoins, as well as their greater future as they move toward becoming global financial infrastructure.