Demystifying Global Payouts Using FIAT and Stablecoins: A Comparative Analysis

Abstract

Cross-border payment systems are undergoing rapid transformation as traditional fiat-based infrastructures face competition from emerging blockchain-based alternatives. This comprehensive assessment examines the evolving landscape of global payment mechanisms, contrasting established correspondent banking networks with stablecoin-based solutions across multiple dimensions, including cost efficiency, settlement speed, geographical accessibility, and regulatory frameworks. Traditional payment rails, while benefiting from widespread institutional adoption and regulatory clarity, face persistent challenges in transaction speed, cost transparency, and accessibility in developing regions. Conversely, stablecoin-based infrastructures demonstrate compelling advantages in settlement efficiency and fee reduction, particularly for smaller-value transfers and corridors connecting to emerging markets. The operational characteristics of these complementary systems reveal distinct optimal use cases, with traditional rails maintaining dominance in high-value, compliance-intensive scenarios while stablecoin solutions gain traction in time-sensitive, lower-value segments, including freelancer payments and e-commerce settlements. The emergence of hybrid models combining fiat on/off-ramps with blockchain settlement layers highlights the increasingly complementary relationship between these payment infrastructures as they converge to address longstanding inefficiencies in the global financial system.