Stablecoins: The Innovation Layer for Foreign Exchange?
by Reuben Blamey Co-Founder, COO AGANT
Stablecoins may have started life as the digital asset world’s version of a digital dollar but today, they’re carving out a role that is much more fundamental. Behind the media headlines and the ongoing regulatory debates, a quiet revolution is underway.
From enabling real-time global payments to building programmable money that does more than sit in a wallet, stablecoins are gradually laying the groundwork for a more interoperable, resilient and modern financial system. The value proposition of stablecoins lies in the enormous efficiency gains they offer versus the payment systems we have today. They represent a homogeneous transaction layer which gives businesses a much more straightforward way to undertake tasks they're already doing regularly. This article examines, in particular, how stablecoins are transforming cross-border payments and foreign exchange transactions, ushering in seamless payments for a world where money needs to move both instantly and globally.
Cross-Border Payments Without the Friction
Global payments remain expensive, slow and opaque. Stablecoins offer a credible alternative. When a business in Brazil wants to pay a freelancer in the Philippines, they currently go through a spaghetti of correspondent banks, FX markups and up to 3 to 5 day settlement times - sometimes more! With stablecoins, those same payments can happen in under 10 seconds and cost a fraction of a cent. That’s not theoretical - it’s happening today on blockchains like Solana, Ethereum and Stellar.
For fintechs and remittance providers, stablecoins are not just cheaper - they’re also programmable. They allow firms to embed compliance, split payments or even restrict flows by geography, all at the protocol layer.
On-Chain FX and Real-Time Settlement
Stablecoins are emerging as a critical tool for foreign exchange transactions and private credit markets. The foreign exchange market moves $7.5 trillion a day but its plumbing hasn’t aged gracefully. Settlement risk still lingers and real-time execution with finality across time zones is a dream for most financial institutions.
Stablecoins enable faster, cheaper, borderless FX transactions by moving beyond traditional systems like SWIFT and faster payments, which are still relatively slow and costly. The UK’s current systems, such as Faster Payments, may appear instant but are not truly real-time on the backend and are still expensive relative to blockchain alternatives. Stablecoins instead introduce the concept of atomic settlement, where both sides of a trade happen simultaneously - or not at all - providing true real-time value transfer globally, and reducing credit and settlement risk.
Stablecoins can eliminate intermediaries and deliver real-time FX at lower costs.
Platforms like Uniswap or Curve already facilitate on-chain FX between USD - and EUR - denominated stablecoins. But zoom out, and the implications are larger: 24/7 FX rails that could eventually complement Continuous Linked Settlement (CLS), especially for emerging market currencies with limited liquidity windows.
While the fintech revolution has transformed the front end of banking and financial transactions for many consumers, stablecoins are now ushering in the same type of revolution for the neglected backend – replacing all the slow, manual processes that go on behind the scenes of the slick-looking apps and user interfaces. Stablecoin innovation is the next upgrade to the plumbing of today’s creaking financial market infrastructure.
Dollar Access for the Unbanked
Here’s a statistic that’s easy to miss: around 1.3 billion adults globally remain unbanked, according to the World Bank - but many of them have smartphones.
Stablecoins provide dollar exposure without needing a U.S. bank account or even a bank at all. In countries with high inflation - think Argentina, Nigeria or Turkey - access to a stable digital fiat currency like the US dollar is a lifeline. It’s not just a store of value. It’s a working currency, used for peer-to-peer payments, payroll or even as collateral in local lending apps.
GBP Stablecoins Address a Non-USD Need
The cryptocurrency market is still largely USD-dominated but global FX markets still require local currency options. A GBP stablecoin addresses this gap, providing an on-chain pound sterling for both domestic and international FX use. This is especially useful for UK -based businesses and global firms with GBP exposure, improving cross-border operations.
Large Public Limited Companies and modern fintechs stand to benefit most from using stablecoins for FX, due to their high volumes of cross-border transactions and the need to reduce credit risk and improve efficiency. Pension funds and asset managers are also beginning to explore stablecoin-based FX mechanisms.
Stablecoins like USDT (Tether) have already enabled democratisation by providing offshore dollar access in the Global South. A similar logic applies to GBP - offering a programmable pound on-chain could export the currency digitally and enhance GBP utility around the world.
Public vs Private Sector Innovation
Some might argue that creating a digital fiat currency should rightly come under the purview of Central Banks. Yet private sector-led stablecoins are faster to build and more adaptive than Central Bank Digital Currencies (CBDCs) are likely to be. Central banks face more systemic risk, encounter more bureaucracy, and inevitably experience slower innovation cycles, making private stablecoins far more practical for enabling FX innovation. As programmable, digital cash for FX and other use cases, stablecoins are an idea whose time has come.
Agant is bringing the world’s 4th largest currency on chain with our pound sterling stablecoin GBPA - building the programmable, sterling-based financial infrastructure for a new generation of institutional financial services.
