Although stablecoin payments are fast, local currency settlement is still a bottleneck: Gravity Team

Cross-border transfers of stablecoins take only a few seconds, but conversion into usable local currencies is still a slower and more fragmented process.

MārtišBesi ītis, CEO of Gravity Team, an emerging market liquidity provider, said that stablecoin infrastructure has evolved into a liquidity issue because the same token performs different functions in transaction and payment scenarios.

stablecoin payments rely on two types of liquidity

Market makers hold stablecoins to quote buying and selling prices, transfer inventories between exchanges, and respond to changes in trading activity. Payment companies use stablecoins to fund exchanges and then issue local currency to recipients.

Trading inventory must remain available on multiple platforms, while payment balances can be used again after settlement. However, when the stablecoin arrives, the payment company still needs to hold enough local currency to complete the other end of the transfer.

Besi tis said: "Stabiloin payment infrastructure is essentially a liquidity issue because the stablecin balance performs completely different functions. Market-makers use it to quote prices on both sides of the order book and manage inventory risk on dozens of related exchanges. Payment businesses use it to fund exchanges and release local currency to recipients."

Gravity Team's analysis of payment channels found that the agent bank model may lock 20% to 40% of monthly transaction traffic in pre-stored accounts. The company said stablecoins could reduce this idle capital, but only if operators were able to maintain well-funded local currency books and hold enough inventory to quote for conversions.

The conversion process remains a bottleneck

A stablecoin payment includes at least two different stages. The first stage transfers the token over the chain, and the second stage converts it into currency that the recipient can use through a local bank account or payment service.

Besi tis said that the second phase has become a new area of competition among payment providers. Each money market has different liquidity levels, bank hours, compliance controls, trading limits and counterparties.

Gravity Team currently supports settlement of the Philippine peso, Indonesian rupiah, Mexican peso, Brazilian real, euro, pound and U.S. dollar, and plans to increase the Vietnamese dong.

Its internal data shows that among the Southeast Asian and Latin American payment channels it serves, 3% to 7% of traditional inbound wire transfers are delayed or refunded on the first attempt. In these markets, once stablecoin transfers are broadcast, the on-chain success rate exceeds 99.9%.

Besi tis warned that the on-chain success rate does not cover the entire payment process. "Local exchange and fund release still need to be completed after the tokens are received."

Operators with direct banking relationships can exercise stricter control over funds, payment deadlines and failed transactions. A partner-based model can cover more countries, but relies on another company's liquidity, availability, transaction limits and how failed payments are handled.

Therefore, Besi tis believes that the business test is not how quickly the tokens can reach the wallet, but whether the entire payment process-including when the main payment path is not available-can allow the recipient to receive the payment in full at the quoted price and within the commitment period.

Stripe and Mastercard delve into stablecoin payments

Large payment companies have invested heavily in integrating stablecoin infrastructure into existing networks. Stripe completed its acquisition of Bridge in February 2025, which provides companies with the infrastructure to receive, store, exchange, issue and spend stablecoins. Mastercard completed its acquisition of BVNK on August 3, and the card organization agreed to pay up to US$1.8 billion (including US$300 million in contingent payments) for technology to connect fiat and stablecoin tracks.

Besi tis described the two acquisitions as logical steps, but also said that global platforms still need to maintain consistent pricing and settlement when adding currencies with different operating conditions.

Gravity Team estimates that among the payment channels it studied, stablecoin settlement costs accounted for 0.1% to 0.4% of principal. The estimated costs for the correspondent bank model range from 3% to 11%, which takes into account foreign exchange spreads, intermediary bank fees and capital use in pre-deposited accounts. These comparative data come from company research, and actual costs may vary depending on payment channels, payment sizes, compliance requirements and the number of intermediate links.

A statement from the Federal Reserve in March 2026 also pointed out that the chain of correspondent banks could make cross-border payments slower, more expensive and less transparent. The Fed said intermediary banks may repeat compliance checks and make it more difficult to determine where funds are held.

Gravity Team launches institutional over-the-counter trading platform

Gravity Team launched an institutional over-the-counter trading platform on August 24 as part of its efforts to connect cryptocurrency liquidity with local legal currency settlement. The company said the service serves as the principal counterparty to transactions within agreed size, price and volatility ranges. Customers receive quotes with a clear validity period without having to execute large orders through the open exchange order book.

The platform provides stablecoin settlement within 60 seconds and supports T+0 fiat currency settlement in more than 20 currencies if local bank conditions permit. T+0 means that the fiat tender party plans to complete settlement on the trading day, rather than one or more business days later.

Gravity Team said it has direct banking relationships in more than 20 markets and the platform is open to payment providers, fintech companies, brokers and other institutions that transfer funds to emerging economies. It also provides inquiry execution and credit lines, subject to its counterparty terms.

The launch of the platform comes at a time when emerging markets are becoming one of the fastest-growing regions for cryptocurrency activity. Cryptocurrency trading volume in the Asia-Pacific region increased by 69% to US$2.36 trillion in the 12 months to June 2025, while activity in Latin America increased by 63%.

For U.S. payment companies, the problem is not limited to transferring dollar-backed tokens overseas. Although the GENIUS Act establishes a federal framework for issuers of payment stablecoins, domestic issuance rules cannot by themselves provide liquidity in the peso, real, Indonesian rupiah or other local currencies in destination markets.

stablecoins can shorten the digital portion of cross-border transfers. However, to complete the payment, local funds, currency exchange, regulatory inspections and an effective fund disbursement channel are still needed.