Stablecoin payments grow as banks retain influence over adoption

TL;DR: Stablecoins are getting cheaper and more widely used for payments, even as supply stalls. Borderless.xyz puts median remittance costs near 1% versus 6.36% for traditional transfers, and Allium says payments rose 45% while supply grew just 0.4%. Meanwhile, a BIS paper suggests that higher bank deposit rates could further slow growth.

Key Takeaways:

Three new reports highlight stablecoins’ potential to lower cross-border payment costs and their growing use in smaller transactions, while suggesting that sluggish supply growth and competition from better-paying bank deposits could shape the sector’s next phase.

Stablecoin remittances can cut costs

A new report has suggested that stablecoin-funded remittances could significantly reduce the cost of sending money internationally, although differences in payment reliability and provider pricing remain important challenges.

According to a third-quarter 2026 report from Borderless.xyz, first reported by Crypto News on October 16, stablecoin-funded transfers cost a median of approximately 1% of the amount sent—$2 for a $200 transfer—compared with the World Bank’s reported global average of 6.36% for traditional remittances in the third quarter of 2025.

The figures imply a potential saving of around 84%, which could be particularly significant for emerging economies and migrant workers sending money home, as lower fees mean recipients can keep more of the money intended for essential expenses, including food, housing, and education.

However, based on the report, the benefits are not uniform worldwide: stablecoin-funded transfers in Sub-Saharan Africa reportedly cost 2.9%, compared with 8.46% for conventional remittances; meanwhile, in Latin America, the respective figures were 1.25% and 5.64%.

Business payments made through stablecoins were also notably less expensive, with a $10,000 stablecoin-funded transfer to the eurozone costing potentially as little as $26 when routed through the lowest-cost provider, compared with $52 across all corridors at the median provider. By comparison, a traditional international bank wire costs between $135 and $150 for the same amount, including transfer fees and an assumed 1% foreign-exchange margin.

The various figures compare different reporting periods—Borderless.xyz covering Q3 2026 and the World Bank the same period in 2025—so they should not be treated as perfectly equivalent measurements, but the differences suggest that stablecoins may be especially valuable in markets where traditional money transfers are expensive.

While reported savings are encouraging, the comparisons do not establish that every stablecoin transfer will be cheaper or more reliable than traditional alternatives, as benefits depend on local payment infrastructure, provider choice, and successful delivery.

Nevertheless, the Borderless.xyz report provides some evidence that stablecoins offer a promising alternative to conventional cross-border payments, potentially making them cheaper and faster.

These boons may also help explain the notable increase in stablecoin payments this year, outlined in another recent report.

Stablecoin supply slows while adoption grows

Another report revealed that stablecoin supply growth has nearly stalled this year, despite adoption and payments growing at a pace, according to blockchain analytics firm Allium.

The report, published October 15, found that stablecoin payments are showing real adoption, growing 45% to $482 billion in 2026, while supply grew only 0.4% through September.

Based on a measurement of stablecoin supply, adjusted volume, payments, agentic payments, and card spend through September 30, 2026, along with commentary from 17 “industry contributors,” Allium’s Q3 2026 report revealed that stablecoin supply grew just 0.4% this year to $305 billion, having surpassed the $300 billion mark by the end of 2025.

However, payments rose 45% through September, with the payment count rising 71% to 1.04 billion and the average payment falling from $544 to $462. In other words, stablecoins are being used for more frequent and smaller payments—increasingly showing the credentials of a real, mass-use payment method.

In terms of other key findings, Allium’s data showed a shift in supply growth away from the issuers that drove it in 2025, with supply at stablecoin giants Tether, Circle (NASDAQ: CRCL), and Ethena falling, while other issuers added a net $6.9 billion; 15 issuers now hold more than $1 billion, up from 11 in 2025.

Agents and cards are also providing new routes into stablecoin spending, if still small in value, as agent payments doubled to 68.3 million in Q3. In contrast, their value dropped to $3.7 million, and spending on stablecoin-linked cards reached $3.9 billion through September, ten times the amount a year earlier. Again, small purchases—those under $50—were king, accounting for 84% of the increase in card transactions.

“Distribution is now where issuers compete,” Allium said. “Open USD shares reserve income with the partners that bring it supply, and companies such as Polymarket and Jupiter issue their own stablecoins backed by existing ones, mainly USDC and PYUSD, while agents and cards open newer routes into spending.”

Wherever payments are converging, on whichever platform, the Borderless.xyz and Allium reports appear to paint a picture of stablecoin becoming an increasingly popular and potentially lower-cost payment method.

This may not be music to the ears of the global banking sector, which has long voiced concerns about the impact the growth of stablecoins may have on its traditional deposit base, payment revenues, and broader role in the global financial system.

However, a new working paper published by the Bank for International Settlements (BIS) show how banks may be able to slow the growth of stablecoins by paying savers more.

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Banks could slow stablecoin growth with better interest rates, but specter of stable yield looms: BIS

Banks may be able to slow the growth of stablecoins like USDT and USDC by paying savers more, according to a working paper published on October 13 by the BIS, an international institution founded to foster monetary and financial cooperation and to serve as a bank for central banks.

Researchers Rashad Ahmed and Iñaki Aldasoro studied weekly U.S. data from January 2019 to June 2025, accounting for BTC prices, Treasury yields, and broader financial conditions. Based on this, their baseline estimates suggest that higher deposit rates are associated with a roughly 3-percentage-point reduction in ten-week stablecoin growth, relative to an average growth rate of around 15%.

The effects are also stronger for USDC than for USDT, which the authors suggest may reflect USDC’s closer ties to U.S. depositors.

“The size of the stablecoin sector therefore depends in part on how banks price deposits,” argued the researchers. “If stablecoins grow to be viewed as a form of digital cash, our results on substitution suggest that their adoption is sensitive to the terms banks offer depositors, and that banks retain some influence over the pace of that adoption through deposit pricing.”

Thus, according to the paper, the main implications of its findings are twofold. First, requiring a proportion of stablecoin reserves to be held in deposits may support liquidity management and limit the negative effects of stablecoin growth on bank funding, but at the cost of “financial fragility” from concentrating large uninsured deposits in a small number of banks.

Secondly, and perhaps more crucially for the banking sector, the findings add to the debate over whether allowing stablecoin holders to earn yield could intensify competition with bank deposits, as the research found a direct correlation between a drop in stablecoin markets and increases in bank interest rates.

“We show that stablecoin balances respond to what banks pay depositors,” read the report. “How that boundary settles will depend on the returns each form of money is allowed to offer.”

When taken with the other two recent reports, these findings suggest that stablecoins may be making payments cheaper and more frequent, but whether that translates into sustained growth will depend on their practical usefulness, the returns available to holders, and how aggressively banks compete for their money.

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FAQs:

How much cheaper are stablecoin remittances?
Borderless.xyz found a median cost of about 1% ($2 on $200), compared with the World Bank’s average of 6.36% for traditional remittances.

Are stablecoin transfers cheaper in Africa and Latin America?
Yes. Sub-Saharan Africa costs 2.9% versus 8.46% for conventional transfers, and Latin America 1.25% versus 5.64%.

Is stablecoin supply growing in 2026?
Barely. Allium says supply grew 0.4% through September to $305 billion, while Tether, Circle, and Ethena supply fell.

Are stablecoin payments growing?
Yes. Payments rose 45% to $482 billion through September, and payment count rose 71% to 1.04 billion, while the average payment shrank to $462.

Can banks slow stablecoin growth?
Possibly. A BIS paper links higher deposit rates to a roughly three-point drop in ten-week stablecoin growth, against a 15% average.

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