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Stablecoins

The stablecoin remittance case rests on the on-ramp and off-ramp, not the blockchain

A dollar-backed stablecoin offers no inherent financial return and occupies the same monetary value as fiat currency. The economic argument for stablecoins in cross-border payments depends entirely on whether they reduce the total cost of money movement—on-ramps, settlement, and off-ramps combined—and whether those savings actually reach the consumer sending the money.

FDP
The Payments Corner
12 min read

A dollar-backed stablecoin is designed to be worth one dollar. It does not offer capital appreciation, and the token itself does not inherently generate interest. Some platforms offer rewards to customers who hold stablecoins with them, but those returns come from the platform's business model, not from the token, and they do not change the question this article examines. Unlike stocks, bonds, or other investment instruments, a stablecoin's value proposition does not depend on generating a financial return for the holder.

That raises a question worth asking as stablecoins move into mainstream financial services. If a stablecoin represents the same monetary value as the currency we already use, what incremental economic benefit does converting that currency into a token actually create?

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FDP

The Payments Corner

30+ years across payments, fintech, banking, and financial infrastructure. Operator-level perspectives on the systems that move money.

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Disclosure: The Payments Corner's founder is employed at Euronet Worldwide, a global infrastructure and transaction processing company. The publication may discuss securities or assets touching that domain. Content is provided for informational and editorial purposes only and should not be considered investment advice.

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