There can be no global economy without cross-border payments.
As the world becomes increasingly connected, the onus is increasingly on cross-border payments, traditionally a source of friction and complexity, to step up and improve their performance.
“Traditional cross-border payments still have many transparency and cost issues. The best experience, at least from a user experience (UX) perspective, is to behave like Venmo: you find the recipient, you choose a currency to send them, and they instantly receive those funds,” Sheraz ShereGM Payments and Trade at Solana Foundationtold PYMNTS. “It’s the North Star for consumer use cases.”
But today’s cross-border reality is anything but a 10.
Shere said that on the consumer side, he would assess the available options at “two or three,” adding that navigating the complexities of these transactions – from high fees and long settlement times to convoluted correspondent banking networks – remained a significant challenge.
This is where blockchain and stablecoin solutions — rather than the broader and often controversial term “crypto” — can play a compelling role.
Learn more: Solana Foundation Bets on Blockchain as a Means of Payment for the General Public Rail
Blockchain, Stablecoins, Cross-border payments
“Blockchain solutions and stablecoins, I don’t like to use the term crypto because it’s more about FinTech, they’ve found product-market fit in cross-border payments,” Shere said, adding that one of the most notable benefits of blockchain technology is disintermediation – removing the need for multiple hops through correspondent banks, which typically slow down and increase the cost of transactions.
In contrast, blockchain-based transactions offer speed, transparency, and low cost, with blockchain platforms like Solana charging a fraction of a cent per transaction.
According to Shere, stablecoins, particularly those backed by trusted issuers like Circle and PayPal, further simplify cross-border payments by pegging their value to fiat currencies like the U.S. dollar. This not only eliminates the volatility often associated with cryptocurrencies, but also introduces a competitive environment for foreign exchange (FX), with stablecoin exchanges offering more favorable rates than traditional banking channels.
For companies expanding internationally, the question arises: should they rely on traditional financial rails or explore blockchain-based alternatives?
The answer, Shere says, lies in evaluating options based on cost, speed And transparency, rather than focusing on the underlying technology. Blockchain and stablecoin solutions are gaining traction, with Web3 companies building infrastructure that integrates both traditional financial systems and blockchain technology. Shere pointed out that legitimate and trusted stablecoin issuers have addressed concerns about transparency and regulation, making stablecoins a viable option for businesses wary of the risks associated with cryptocurrencies.
“You get disintermediation, you get speed, you get transparency, you get extremely weak “cost,” he said. “It comes across as a value proposition for particularly strong use cases, such as payments.”
However, Shere said, many businesses have become accustomed to the inefficiencies of the existing system, tolerating long settlement times and unfavourable exchange rates. But As blockchain technology becomes more integrated into financial systems, these issues will gradually be alleviated.
The Future of Web3 in Payments
Interestingly, as Shere pointed out, Solana own The user base tends to favor smaller transactions, indicating increased adoption among small businesses and retail users, particularly for use cases such as remittances and payments to contractors.
When considering the future impact of blockchain technologies on cross-border payments, Shere identified speed as the most transformative factor. Unlike traditional systems, where payments can take days to settle, blockchain enables For instant settlement and instant custody. Shere said sending stablecoins like USDC or PayPal’s PYUSD can take less than a second to settle, giving businesses immediate access to their funds.
While speed is the immediate advantage, Shere also sees greater potential for innovation in the areas of reduced costs, improved privacy And or even new forms of asset management, such as tokenized real assets. As more businesses and consumers discover the benefits of blockchain-based payments, the industry is poised to experience a significant shift towards these technologies.
Another important consideration for businesses is custody solutions. Many businesses may be unsure of how to securely manage their digital assets. Shere said there was are A wide variety of custody options are available, from self-custody to enterprise-level custody providers that offer robust security features like multi-signature protocols. For those concerned about privacy, innovations like confidential transfers on the Solana blockchain can hide the amount on transactions, providing an additional level of discretion to businesses.
“The technology is there. It’s very easy to do these things quickly and scalably,” he said. “The early stages of development are simple cross-border transfers.”
