BIS Paper Claims Stablecoins Can Reduce Cross-Border Settlement Friction

The Bank for International Settlements (BIS) has released Working Paper No. 1385, comparing the cross-border payment costs of traditional banks, fintech remittance companies, and stablecoins. The paper points out that stablecoins can facilitate cross-border transfers through networks like Ethereum, Solana, and Tron, reducing reliance on correspondent banks and SWIFT. The exchange rates for major currency stablecoins are close to wholesale foreign exchange rates, and on-chain transfer fees are relatively low. However, the complete process of 'fiat currency - stablecoin - fiat currency' still involves transaction, withdrawal, and deposit fees. While stablecoins have restructured intermediary roles, they have not eliminated intermediaries. Insufficient market depth limits the cost advantages for large payments, and the advantages in some emerging markets are related to capital controls and demand for US dollars.

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