Why Stablecoins and on-chain fluidity are beating

While traditional payment systems remain outdated, expensive and slow, global commerce is expanding rapidly. Both businesses and individuals struggle with high transaction fees and long settlements, with some people having very limited access to the banking system.

People and businesses have relied on decades of outdated, inefficient systems for transferring money across borders before cryptocurrencies, especially stubcoins, appeared. The main issues with traditional banking and financial service providers are late payments, high fees and lack of liquidity.

Fortunately, Stablecoins and on-chain liquidity providers address the issue by providing up-to-date, real-time, and low-cost transactions.

Traditional payments are failing business

From African merchants to Southeast Asian freelancers to Latin American businesses, individuals and businesses suffer from delays, high fees and liquidity issues in cross-border payments.

For example, we are facing strong criticism of the inefficiency of global payments using Swift, a global messaging network for financial transactions. 66% of Swift transactions arrive within 24 hours, but usually takes 1-3 business days for funds that do not require manual confirmation under normal conditions. It may take up to a month if a manual check is required.

Don’t forget the transaction fees associated with using Swift. Don’t forget to receive prompt fees, fee reception, brokerage fees, and sometimes forex fees.

Some of the main reasons behind the inefficiency of fast trading are compliance checks, incorrect payment details, and the involvement of multiple intermediary banks.

Traditional Fintech isn’t enough

The rise of digital payment platforms such as Wise, PayPal and Stripe has made accessibility for many individuals and businesses in developed countries, but it relies on traditional financial networks.

The problems with traditional payment systems arise as demand continues to increase. According to a Foley report last August, the number of cross-border settlements around the world reached $190.1 trillion in 2023, exceeding $290 trillion by 2030.

Each cross-border transaction must pass through multiple layers of processing and intermediary to reach its destination.

For example, Nigerian businesses that have received payments from Europe usually need to convert their funds from Euro to US Dollar to Naira multiple times before cashing out from local banks. This will cost your business at an additional cost.

This suggests the need for a payment system that eliminates these friction points. Both businesses and individuals need access to real-time trading and liquidity. That’s why stubcoins like Tether (USDT) and chain liquidity providers like Mantha have seen impressive growth over the past few years.

Actual solution: Stubcoin and chain liquidity

Unlike traditional banking systems, Stablecoins (cryptocurrency fixed to fiat assets like US dollars) operates 24/7 without a man-in-the-middle, thanks to the characteristics, centering, immutability and transparency of blockchain technology.

Stablecoins have experienced significant growth over the past five years. For example, USDT’s market capitalization has skyrocketed from $4.6 billion in March 2020 to more than the previous $142 billion. This exceeded Stablecoin’s total market capitalization of $230 billion. This development demonstrates a powerful utility in asset class in driving efficient transactions.

However, to make transactions seamlessly easier, Stablecoins require liquidity. Digital payment infrastructure builders like MANSA develop solutions that enable fast and perfect transactions around the world by providing on-chain liquidity. The key to enabling instant and transparent transactions without third parties such as banks and payment networks is to leverage Stablecoins and chain liquidity.

Nigerian business examples look different in Stablecoins. Nigerian suppliers can receive USDT from European buyers and use Mantha’s on-chain liquidity pool to instantly convert funds to local Naira. This means that business owners do not have to pay multi-tier fees and minimize transaction delays.

Stablecoins and on-chain liquidity providers have already eliminated the main issues traditional finance has not achieved: delays and transaction costs.

Underserved markets are the biggest winners

The real winners of Stablecoin adoption are underserved regions such as Africa and Latin America. Brazil’s net imports reached $12.9 billion in the first nine months of 2024, an increase of 60.7% from the previous year, according to a Reuters report. In particular, Stablecoins accounted for almost 70% of all crypto transactions in the country in 2024.

The growth of USDT transfers and inter-crypto on-ramps in emerging markets proves that users prefer stable chain payments over traditional bank rails.

Regulators and policymakers should view stubcoins and chain liquidity as solutions as they reduce ridiculous friction, reduce unserved people to banks, and are more efficient in remittances.

The future of Stablecoins and Global Payments

Despite the expansion of adoption, Stablecoins and chain liquidity providers are not here to replace traditional financial institutions. They are here to improve them. The future of payments is about flexibility, speed and accessibility.

Financial institutions, payment services, and businesses have already integrated stability into payment flows. Last year, Wise became the first foreign company to access Zengin, the Japanese bank payment clearing network. This allowed the company to significantly reduce cross-border transaction fees by eliminating intermediary banks.

The transition from traditional finances to stubcoin is not speculative. As demand for transparency, low cost, seamless global transactions increases, it is happening now. Increased liquidity in the chain would potentially reduce reliance on the outdated banking system.