How Stablecoins Are Transforming Global Payments: A Deep Dive with Borderless
Introduction
Traditional banking and crypto run on different financial systems. Crypto is decentralized and global, while banks control the backbone of everyday finance. However, the gap between these two systems creates friction for users moving money.
The bridges between fiat and crypto, referred to as on and off-ramps, are often slow and expensive. Regulatory hurdles and compliance requirements further complicate the process, making it difficult for users to transition between traditional currencies and digital assets. As a result, many businesses and individuals face operational roadblocks that limit adoption.
These obstacles make it harder for businesses and individuals to fully embrace the potential of crypto. In this write-up, we’ll explore how these gateways function, the challenges that companies like Borderless are addressing, and how these concepts compare across various regions.
How Crypto Moves In and Out of the Banking System
To understand the challenges of moving between fiat and crypto, we need to break down the primary methods that allow users to convert between digital assets and fiat currencies.
On-Ramps: How Users Get Money Onchain
On-ramps allow users to acquire digital assets using traditional payment or banking methods. While a range of options exist, the following are the most common on-ramps users rely on:
- Centralized exchanges: Crypto exchanges like Kraken, Binance, and Coinbase are among the most common on-ramps, allowing users to deposit fiat currency via bank transfers, credit/debit cards, or third-party payment providers. They offer high liquidity and ease of use and are required to enforce strict KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance.
- Payment processors: Companies like MoonPay integrate fiat-to-crypto conversion directly into wallets and DeFi platforms, allowing users to buy crypto without switching platforms. However, they often face banking restrictions and require partnerships with financial institutions willing to process crypto transactions.
- Neobanks: Some financial institutions, particularly in Europe and parts of Asia, have started embracing crypto services. Neobanks like Revolut and N26 allow customers to buy and hold crypto within their apps, but these services still operate within the confines of traditional banking regulations.
Off-Ramps: How Users Exit Crypto
Off-ramps allow users to convert digital assets back into fiat currency. This could be for the purpose of paying employees, cashing out profits, or settling merchant transactions. Here are the most popular ways that users currently off-ramp crypto:
- Bank transfers from exchanges: The most common method involves selling crypto on an exchange and withdrawing fiat to a linked bank account. Users can then access these funds for everyday expenses or business operations.
- Crypto debit cards: Certain companies offer debit cards that allow users to spend crypto directly. These cards work by converting digital assets into traditional currency at the point of sale, removing the need for converting to fiat on your own.
- Crypto-backed loans: Some platforms allow users to take out loans using crypto as collateral. This means that instead of selling their assets, users can borrow against them and receive fiat while maintaining exposure to price movements.
While more options are becoming available to convert from crypto to fiat, these methods often face banking restrictions and other challenges. This is exactly where Borderless comes in. I had the opportunity to sit down with the CEO Kevin and learn about how they’re shaping the future of global payments.
How Borderless Approaches Global Stablecoin Payments
Borderless is building the connective tissue for stablecoin-powered global payments. The company’s mission is clear: make global money movement fast and cost-effective using stablecoins. Founded by Kevin Lehtiniitty, Borderless is the result of years of experience building asset-backed stablecoins and connecting digital assets with traditional finance.
Kevin’s motivation for starting Borderless stems from a belief in stablecoins as an equalizer in global finance:
“Stablecoins level the playing field. They give anyone, anywhere, access to a dollar-denominated financial system—without needing a U.S. bank account. That’s a big deal.”
This vision is reflected in everything that Borderless works towards. At its core, Borderless provides a unified API and ledger that allows payment service providers, fintech companies, and other businesses to send and receive stablecoin payments. Rather than forcing businesses to integrate with dozens of local providers and navigate regulatory complexity, Borderless brings everything together into a single interface. This unification makes global payments simpler by abstracting away the complexity of transacting across stablecoins, blockchains, and jurisdictions.
The Ultimate Challenge Facing Stablecoins: Fragmentation
The team at Borderless highlighted fragmentation as the biggest challenge facing stablecoin payments. This is present in three important areas:
- Token fragmentation: Liquidity is currently spread across a growing list of stablecoins—USDC, USDT, PYUSD, and many others. When businesses rely on different stablecoins, even a basic dollar-denominated transaction can become inefficient.
- Network fragmentation: Even when the same stablecoin is used, it may exist on different blockchains. Moving funds across these networks typically requires bridges that introduce added friction and risk.
- Geographic fragmentation: Different regions rely on different providers and infrastructure. Every country or region has its own preferred platforms, rules, and evolving regulatory standards.
The Borderless Fix for a Fragmented Stablecoin Ecosystem
Borderless directly addresses all three with their global network of counterparties. This network connects licensed financial institutions, stablecoin issuers, and liquidity providers into a cohesive routing network. Through a single integration with Borderless, a business can tap into liquidity around the world. Additionally, customers retain direct relationships with liquidity providers and can configure who they work with and under what terms.
This brings several important benefits:
- Transparency: Businesses can see, select, and perform diligence on every counterparty in Borderless’ network. This is especially important in emerging markets, where regulatory and operational standards vary widely.
- Flexibility: Users can choose specific counterparties or let Borderless route based on price, speed, and other preferences.
- Unification: Instead of integrating with multiple providers, Borderless offers a single integration point and a single ledger for global stablecoin flows.
- Risk and compliance: From Bitso in Mexico to Yellow Card in Africa, Borderless connects to licensed entities and makes it easy for businesses to meet compliance standards and reduce counterparty risk.
Borderless' infrastructure addresses much of the technical and operational complexity, but navigating regulation is just as critical. The rules surrounding stablecoins vary significantly by region, shaping how and where this infrastructure can be deployed effectively.
Global Banking and Regulatory Challenges: A Regional Comparison
The regulatory stance on crypto varies widely across different regions. In some places, clear regulations enable smoother processes, while in others, banks remain hesitant due to unclear or restrictive policies. This variation impacts everything from liquidity to business operations.
Crypto regulations in the United States are improving but remain unclear, creating challenges for businesses operating in the space. In contrast, Europe encourages innovation while ensuring compliance with MiCA. In LATAM and parts of Asia, stablecoins are increasingly used to counter inflation and banking restrictions, despite ongoing regulatory uncertainty.
The Road Ahead for Stablecoins
With stablecoin usage accelerating globally, the question is no longer if they’ll play a major role in global payments, but how that role will be shaped. Their long-term impact will depend on regulatory clarity, stronger integrations with banking systems, and smarter on/off-ramp infrastructure. Borderless believes that the next few years will be critical for stablecoin adoption.
On the technology side, Borderless thinks that stablecoins have the potential to serve as a neutral settlement layer that connects bank accounts across geographies in real time. This would move the world beyond what’s become known as the “stablecoin sandwich,” where crypto is merely the intermediary in a bank-to-bank transfer. Instead, stablecoins can create direct cross-border value transfer networks that are more efficient and transparent than current infrastructure.
Borderless and Dynamic feel that stablecoins will continue to be especially important in emerging markets, where inflation and limited banking access make traditional financial systems unreliable. But with this growing opportunity comes a need for caution. Trust, especially at the institutional level, is hard-won and easily lost—and as Kevin put it during our conversation, the stakes couldn’t be higher:
“Stablecoins offer an incredible opportunity to build faster, cheaper, and more inclusive financial infrastructure—but the stakes are high. If a major enterprise adopts one and it fails, the damage to trust could set the industry back a decade.”
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