Cross border payments outlook 2026: Stablecoins in an unstable world
I wasn’t intending to focus on digital assets for this article, but it’s become increasingly difficult to ignore the growing discussion - often from my own clients and partners - about the potential of blockchain-based payment rails and stablecoins. From treasury teams exploring faster settlement options to banks assessing alternative liquidity models, these technologies are moving from the periphery into practical consideration.
This shift is not being driven by hype, but by the growing recognition that traditional infrastructure alone doesn’t meet all the demands of the current environment - particularly amid rising FX volatility, geopolitical risk and the need for greater agility in international flows.
Here are three themes I expect to shape the year ahead.
Stablecoin potential has been proven - now comes the hard part
The idea of using stablecoins for cross-border payments has been circulating for several years. The core appeal is well understood: near-instant settlement across borders, available 24/7, with the potential for lower costs. It’s not hard to see why this excites the market - especially for use cases in high-cost corridors, emerging markets, or scenarios requiring continuous liquidity.
But despite high volumes of stablecoin transfers on public blockchains - US$33 trillion in 2025, up 72% from the previous year - real-world adoption for commercial payments remains limited. The reason is simple: there is a large gap between the theoretical capabilities of stablecoins and the operational realities of moving value across borders.
To use stablecoins meaningfully in payments, institutions still rely on infrastructure to convert funds to and from fiat currency at either end of the transaction. These on- and off-ramps - banking rails, exchanges, local payout partners - are fragmented, slow and often poorly integrated with the systems that treasurers and financial institutions depend on.
While a stablecoin might move instantly on-chain, that does not help if funds then sit in limbo awaiting FX conversion or local disbursement.
For stablecoin payments to be truly viable at scale, we need solutions that orchestrate seamless connections between tradfi and blockchain layers and their respective complexities. Success will depend on making the stablecoin experience operationally viable: embedded in treasury workflows, compliant with regulation and fully integrated with the bank accounts, networks and currencies that businesses use every day.
The blockchain industry has proven the technology’s potential in cross-border payments. This year’s challenge is making it part of the system.
Digital assets are waiting on the rules to catch up
If 2025 marked a turning point for digital asset regulation, 2026 will be the year we begin to see how those rules shape adoption. The passage of frameworks like MiCA in Europe and the U.S. GENIUS Act established much-needed legal scaffolding for stablecoin issuance, reserve backing and licensing. That is a significant step forward.
But clarity on paper doesn’t automatically translate into operational certainty. Today, stablecoin compliance capabilities are highly variable - especially when it comes to know-your-customer (KYC), anti-money laundering (AML) and auditability of reserves. And while stablecoins can offer traceability via public ledgers, that doesn’t substitute for governance, oversight and industry-wide standards.
There have been real improvements: leading issuers have frozen illicit wallets at the request of law enforcement; network-level monitoring tools now automate Travel Rule compliance and screen for sanctioned wallets; and some platforms offer pre-integrated KYC and AML across participant networks.
Yet even with those improvements, regulators and traditional finance leaders remain rightly cautious. Stablecoins are still unevenly supervised, particularly in emerging markets and there are unanswered questions around redemptions, consumer protections, and systemic risk.
As we look ahead, broad adoption of stablecoins in cross-border payments will require more than just legal compliance. It will depend on mature best practices, institutional-grade transparency and strong coordination between regulators, financial institutions and service providers.
Global volatility is leading treasury teams to plant more hedges
Recent years have seen the world face shifting trade dynamics, persistent inflation, and FX instability - and it doesn’t look like 2026 will be any different. These conditions are driving renewed attention to hedging strategies, both traditional and new.
The fundamentals haven’t changed: forward contracts, options, and swaps continue to be core instruments for managing currency exposure. What has changed is the level of urgency and flexibility needed. Companies are adjusting hedge tenors more frequently, holding more dollar liquidity and re-evaluating the channels through which they move funds across borders.
One newer strategy gaining traction is the use of digital assets - particularly USD stablecoins - as tactical tools to mitigate FX exposure. In markets with unstable local currencies or capital controls, receiving or holding value in a USD-pegged stablecoin offers a way to avoid local currency depreciation. But this is no longer limited to emerging markets. Globally, as geopolitical tensions and macroeconomic shocks increase the volatility of even major currency pairs, companies are looking for ways to reduce the time funds are exposed to FX risk.
However, these strategies come with caveats. Using stablecoins for hedging raises counterparty, regulatory, and operational questions. Most treasurers rightly treat stablecoin use as a short-term or transactional solution, not a replacement for traditional FX hedging. But as real-time payments grow and firms seek more agile treasury strategies, stablecoins can add useful optionality - especially for reducing settlement windows or managing intra-day liquidity.
In 2026, I expect to see more institutions explore blended approaches: using traditional hedging tools for known exposures, while integrating real-time FX and tokenised liquidity solutions for faster, more flexible execution. The goal is not to replace existing frameworks, but to enhance resilience amid global uncertainty.
The cross-border payments industry in 2026 will be shaped by a convergence of innovation and operational discipline. Stablecoins may well become a powerful tool - but only when they are embedded into infrastructure that meets the standards of traditional finance. Regulation is progressing, but best practices and institutional coordination must follow. And amid global volatility, treasurers are reaching for broader, more dynamic hedging strategies that combine old tools with new ones.
For financial institutions and corporates, the imperative is clear: stay informed, build for flexibility and insist on governance. The direction of travel is promising, but real adoption will depend on the hard work of integration, compliance and risk management.
