Crypto

Stablecoins for remittances? A solution in search of a problem

Published

8 months ago

September 11, 2025

Stablecoins for remittances? A solution in search of a problem

Opinion on the future of cryptocurrency remains divided and dogmatic. The protagonists see it transforming the global payments system. The sceptics see it as a solution in search of a problem.

Let’s leave Bitcoin as a payments vehicle to one side. It has clearly found a substantial niche in catering for the payments requirements of drug gangs, smugglers, scammers, kidnappers, evaders of tax and capital controls, and money launderers – in short, it is the payments system of choice for the very substantial global illegal economy, replacing the cumbersome inefficiency of suitcases of banknotes. But for everyday transactions and transfers, Bitcoin doesn’t provide a useful payments function, either domestically or internationally.

The existing range of stablecoins doesn’t seem up to the task.

It has been suggested, including on The Interpreter, that stablecoins might provide the crypto-based payments solution. Stablecoins are digital currency with a fixed value against a conventional currency (usually the US dollar), in theory backed by conventional assets such as government securities.

The existing range of stablecoins doesn’t seem up to the task. Their value, in theory stable, is not assured. Terra and Luna lost most of their value, and even the largest stablecoin – Tether – has been fined for false statements about its backing. For those who are squeamish about their associations, stablecoins have the same potential for nefarious use as Bitcoin. Tether was the vehicle for a huge UK money-laundering scheme and its proponents laud its privacy and ability to avoid regulation.

As stablecoins currently bypass the requirements of know-your-customer and anti-money-laundering, the authorities will either have to give up on these requirements (which is unlikely) or enforce them on cyber-currencies, which would remove their main attraction of anonymity.

For everyday transactions and transfers, Bitcoin doesn’t provide a useful payments function, either domestically or internationally (Jievani Weerasinghe/Unsplash)

President Trump’s Genius Act may possibly address these issues, with regulations for combating money-laundering and other illicit activity. Stablecoins may be issued by institutions with unquestionable integrity: for example, JP Morgan plans to issue one.

If these issues are resolved, stablecoins might seem to have some advantages over the bank-based international payments system. The bank system is, indeed, very complicated. It involves multiple links: SWIFT intermediates a secure transfer message (it is not, itself, a payments system); the sending bank must have a trusted correspondent bank in the foreign country; then there is an exchange rate transaction, which will in turn require a two-way transaction via the US dollar to make the conversion using the deep US foreign-exchange markets and the Fedwire/CHIPS payments systems; and then the usual domestic payments infrastructure completes the transaction by shifting the money from the correspondent bank to the recipient’s bank. All this complexity has a cost. As the banks were, until recent years, the only way of making these transfers securely, there was a heavy monopoly levy as well. Big customers got better rates, but small transfers – workers’ remittances – paid exorbitantly.

Stablecoins could bypass some of this complexity. If the recipient had a wallet for the same stablecoin as the sender, stablecoins could be purchased and the transfer would be simple and secure. The hitch is that the recipient would still have to convert the stablecoin into local currency before they could make a purchase. Who will exchange a JP Morgan stablecoin for local currency (and what commission will they charge)?

Where crypto could potentially find a useful payments role is in the form of a central bank digital currency.

While the crypto promoters are trying to find an answer for this exchange problem, the bank-based system has taken note of the emerging alternatives. What do monopolists do when they are confronted by competition? They learn to compete. In recent years, commercial banks and other traditional payments systems have given far better exchange rates than formerly. For example, Wise will make a remittance transaction swiftly and with a favourable exchange rate, without going through any stablecoin links.

In short, stablecoins may have other uses (perhaps as a programable currency to facilitate commercial transactions), but are uncompetitive for international transfers.

Where crypto could potentially find a useful payments role is in the form of a central bank digital currency (CBDC). Central banks’ digital currency is already the key element in the domestic payments system. A CBDC could be used in international transactions to bypass both SWIFT and the need for a foreign correspondent bank. Some central banks are already experimenting with CBDCs to make international transfers to foreign central banks, but no central bank would allow its CBDCs to be held by the general public, as this would present a major threat to the stability of the conventional banking system.

America is, unsurprisingly, not rushing to support an innovation that might undermine the dollar’s global role. The Genius Act specifically prohibits the US Federal Reserve from developing a CBDC. Without a US CBDC, it is hard to see how a CBDC-based global payments system could rival the existing arrangements.

Crypto

ADI Foundation and Settlemint Launch ADGM Tokenization Rail for $30.9B RWAs

Published

11 hours ago

May 14, 2026

Press Room

ADI Foundation and Settlemint Launch ADGM Tokenization Rail for .9B RWAs

Integrated Infrastructure for Institutional Adoption

ADI Foundation and Settlemint announced a partnership on May 13 to launch a new digital securities infrastructure on the ADI Chain, aiming to streamline the tokenization of assets within the Abu Dhabi Global Market (ADGM) regulatory framework.

The collaboration integrates ADI Foundation’s compliance-ready Layer-2 blockchain with Settlemint’s digital asset lifecycle platform (DALP). The combined system is designed to handle the entire lifespan of a digital security, from initial token creation and on-chain recording to post-trade servicing and management.

The move addresses a primary hurdle for institutional investors: the difficulty of coordinating issuance, trading, settlement, and custody across fragmented jurisdictions. By providing an integrated architecture, the partners aim to offer a unified pathway for institutions to move traditional assets onto the blockchain.

“The future of investment and trading will not only be digitized, but also available 24 hours a day, 7 days a week,” said Andrey Lazorenko, CEO of ADI Foundation. “Our partnership brings together market infrastructure, institutional-grade blockchain, and a digital asset lifecycle platform to tokenize equities and trade them on secondary platforms.”

According to a media statement, the platform utilizes Settlemint’s implementation of the ERC-3643 standard—a protocol specifically designed for security tokens to ensure compliance with regulatory requirements. While the partnership is initially focusing on equity tokenization, the infrastructure is built to support a variety of other tokenized securities and financial instruments, pending regulatory approval.

The announcement comes as institutional interest in real-world assets ( RWAs) on-chain continues to accelerate. According to data from RWA.xyz, tokenized RWAs currently represent approximately $30.92 billion in on-chain value, with tokenized U.S. Treasuries accounting for roughly $15.20 billion of that total. Market analysts expect this trend to scale significantly. A 2026 analysis by BCG suggests the digital asset market could surge from $0.6 trillion in 2025 to $18.9 trillion by 2033.

Matthew Van Niekerk, co-founder and president of Settlemint, characterized the partnership as a “blueprint” for the broader financial industry.

“This partnership proves that regulated, multi-asset tokenization at national scale on public blockchains is not just feasible, but live,” Van Niekerk said. He added that the infrastructure is intended to be a model that central securities depositories (CSDs), exchanges, and clearing houses can adopt to integrate digital assets into existing operations.

Crypto

BlackRock COO: Cryptocurrency Demand Surpasses Firm’s Expectations, Signaling a Shift in Value

Published

23 hours ago

May 13, 2026

Press Room

BlackRock COO: Cryptocurrency Demand Surpasses Firm’s Expectations, Signaling a Shift in Value

BlackRock Chief Operating Officer Rob Goldstein revealed that demand for cryptocurrency has significantly exceeded the firm’s initial projections, marking a notable shift in institutional sentiment toward digital assets. Speaking during a Binance online stream, Goldstein addressed the market’s reception of BlackRock’s spot Bitcoin exchange-traded fund (ETF), IBIT, and outlined the asset manager’s broader strategic outlook on blockchain-based finance.

Demand Driven by Value Proposition, Not Speculation

Goldstein emphasized that the global demand for IBIT was stronger than anticipated, describing the interest not as fleeting speculative enthusiasm but as a recognition of a new value proposition rooted in emerging technology. He noted that investors are increasingly viewing cryptocurrency as a distinct asset class with potential for long-term portfolio diversification, rather than a short-term trading vehicle. This perspective aligns with BlackRock’s broader push to integrate digital assets into traditional investment frameworks.

Tokenization and the Future of Capital Markets

Goldstein predicted that the tokenization of capital market instruments remains in its early stages, with future growth expected to be measured in multiples rather than incremental percentages. He argued that blockchain infrastructure could fundamentally reshape how assets are issued, traded, and settled, reducing friction and increasing transparency. This view is consistent with growing industry interest in real-world asset (RWA) tokenization, a trend that major financial institutions are beginning to explore.

AI Agents and Digital Rail Transactions

In a forward-looking comment, Goldstein suggested that artificial intelligence agents will eventually conduct transactions directly via digital rails, or blockchain infrastructure, rather than logging into traditional bank accounts. This vision points to a future where automated systems interact with decentralized finance protocols, potentially streamlining operations across supply chains, payments, and asset management. While still conceptual, the statement underscores BlackRock’s attention to the convergence of AI and blockchain technologies.

The Education Gap Remains a Key Obstacle

Goldstein identified the primary barrier to broader adoption as a lack of investor education regarding the technical aspects of virtual assets and efficient portfolio allocation. Many institutional and retail investors remain uncertain about how to evaluate cryptocurrencies, assess risks, and integrate them into existing investment strategies. BlackRock’s emphasis on education suggests that the firm sees informed participation as critical to sustainable market growth.

Conclusion

BlackRock’s acknowledgment that cryptocurrency demand has exceeded expectations carries significant weight, given the firm’s status as the world’s largest asset manager with over $10 trillion in assets under management. Goldstein’s comments reflect a maturing institutional perspective that views digital assets not as a passing trend but as a structural evolution in finance. For investors, the key takeaway is that major financial players are moving beyond skepticism and actively building infrastructure for a tokenized future, even as educational gaps persist.

FAQs

Q1: What did BlackRock’s COO say about cryptocurrency demand?
Rob Goldstein stated that demand for cryptocurrency, particularly through BlackRock’s IBIT Bitcoin ETF, has exceeded the firm’s expectations, driven by a recognition of its value as an emerging technology rather than mere speculation.

Q2: What is BlackRock’s view on tokenization?
Goldstein described tokenization of capital market tools as still in its infancy, with future growth expected to be exponential. He believes blockchain infrastructure will play a key role in transforming how assets are managed and traded.

Q3: What is the biggest obstacle to cryptocurrency adoption according to BlackRock?
The main challenge is a lack of investor education on the technical aspects of virtual assets and how to allocate them effectively within a portfolio, according to Goldstein.

Crypto

MEXC Commits to 1,000 BTC Purchase as Guardian Fund Targets $500M Expansion

Published

1 day ago

May 13, 2026

Press Room

MEXC Commits to 1,000 BTC Purchase as Guardian Fund Targets 0M Expansion

Key Takeaways

BTC and USDT to Serve as Dual Reserve System for Market Stability

Crypto exchange MEXC is deepening its focus on reserve strength and user protection, announcing plans to expand its Guardian Fund fivefold to $500 million and acquire 1,000 bitcoin as part of a broader risk management strategy.

The exchange said the initiative will be rolled out over the next two years and is designed to create a dual-reserve structure combining liquid stablecoin holdings with long-term BTC reserves. The framework is intended to bolster platform stability and improve resilience during periods of market stress.

The announcement comes as MEXC continues to attract new capital and users. According to data from Defillama, the exchange recorded $271.6 million in net inflows over the past month through May 11, reflecting increased trading activity and participation across global markets.

Under the revised structure, the Guardian Fund will continue to hold significant USDT reserves to ensure immediate liquidity and operational flexibility. The addition of bitcoin is intended to provide a longer-term store of value capable of preserving purchasing power across market cycles.

Transparency Remains Key for MEXC

MEXC said the strategy is part of a disciplined reserve management approach rather than a reaction to short-term volatility. The company framed the expansion as an effort to build infrastructure comparable to institutional-grade financial safeguards increasingly expected in the digital asset industry.

“Trust has to be capitalized, not just claimed. The expansion of the Guardian Fund and the addition of bitcoin reserves reflect our commitment to building protection infrastructure that helps users access infinite opportunities with greater confidence,” CEO Vugar Usi said in a statement.

The exchange also emphasized transparency. Wallet addresses tied to the Guardian Fund’s USDT and bitcoin holdings have been disclosed publicly, allowing users to verify reserve balances on-chain in real time. The move highlights a broader trend among large trading platforms seeking to differentiate themselves through stronger balance sheets and more visible proof-of-reserves mechanisms.

For MEXC, the Guardian Fund expansion forms part of a wider push to position itself as a global platform capable of supporting long-term growth. The company said the initiative aligns with its broader strategy of improving transparency, strengthening risk management, and protecting users during periods of heightened market uncertainty.