Stablecoins Are a “WhatsApp Moment” For International Money Transfers
- Stablecoins are reforming international money transfers, similar to how WhatsApp revolutionized international calls.
- A16z detailed how stablecoins are enabling free and instant cross-border payments without intermediaries and processing delays.
The internet brought huge changes to our daily life, mainly in terms of communication and money transactions. Cross-border communication has transformed significantly after the development of social media applications. It didn’t take much time to eliminate international calling and messaging associated with high costs and delays.
Today, no one recognizes sending letters through post offices or making international calls through phone booths. Social media platforms have made calling and texting instant and free, no matter in which corner you reside across the globe.
The advent of blockchain technology is now transforming the fintech space. This is not different from how the internet changed international communication. Blockchain is like a seed that gave birth to many branches. Cryptocurrencies, stablecoins, DeFi, NFTs, and the Metaverse are a few examples.
The main purpose behind cryptocurrency development is to eliminate intermediaries to make cross-border payments. Stablecoins are serving this purpose more efficiently than cryptocurrencies.
Renowned venture capital firm Andreessen Horowitz recently published a blog post on stablecoins and their prevailing usage in cross-border payments. It reads,
“Just as WhatsApp disrupted costly international phone calls, blockchain payments and stablecoins are transforming global money transfers.”
Stablecoins Enable Instant International Money Transfers With No Cost
The blog post delved deep into how stablecoins have already started to transform international transactions. It even compared the costs involved with stablecoins to those of fiat currencies with an example.
For instance, sending $200 from the US to Colombia using traditional payment methods will cost $12.13. But stablecoins can make this transfer with a cost as little as $0.01. This is because traditional payment methods involve intermediaries, which charge costs for making a transaction.
The a16z blog post said the current global payment system consists of multiple intermediaries. Payment processors, acquiring banks, issuing banks, local banks, corresponding banks, foreign exchanges, card networks, etc. Each of them takes a cut, which makes traditional payments costly and slow.
Stablecoins are not only revolutionizing remittance payments but also boosting B2B payments. It took the case of a16z and said if the company makes a business transaction from Mexico to Vietnam, it takes 3 -7 business days to process it and costs around $15 for every $1000 transacted. Elon Musk’s SpaceX has already adopted stablecoins for its B2B transactions, avoiding delays and high costs.
The prevalence of stablecoin usage is what made them surpass a significant $200 billion market cap. The Ark Invest report published this year found that stablecoins recorded an annualized transaction value of $15.6 trillion in 2024. This makes 119% and 200% of the transaction volume of payment giants Visa and MasterCard, respectively.
This is not the first time a16z has published a report on stablecoin growth. In December last year, the venture capital firm published another blog post on stablecoins and their capability to dominate traditional global payments.
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Stablecoins Are a “WhatsApp Moment” For International Money Transfers
- Stablecoins are reforming international money transfers, similar to how WhatsApp revolutionized international calls.
- A16z detailed how stablecoins are enabling free and instant cross-border payments without intermediaries and processing delays.
The internet brought huge changes to our daily life, mainly in terms of communication and money transactions. Cross-border communication has transformed significantly after the development of social media applications. It didn’t take much time to eliminate international calling and messaging associated with high costs and delays.
Today, no one recognizes sending letters through post offices or making international calls through phone booths. Social media platforms have made calling and texting instant and free, no matter in which corner you reside across the globe.
The advent of blockchain technology is now transforming the fintech space. This is not different from how the internet changed international communication. Blockchain is like a seed that gave birth to many branches. Cryptocurrencies, stablecoins, DeFi, NFTs, and the Metaverse are a few examples.
The main purpose behind cryptocurrency development is to eliminate intermediaries to make cross-border payments. Stablecoins are serving this purpose more efficiently than cryptocurrencies.
Renowned venture capital firm Andreessen Horowitz recently published a blog post on stablecoins and their prevailing usage in cross-border payments. It reads,
“Just as WhatsApp disrupted costly international phone calls, blockchain payments and stablecoins are transforming global money transfers.”
Stablecoins Enable Instant International Money Transfers With No Cost
The blog post delved deep into how stablecoins have already started to transform international transactions. It even compared the costs involved with stablecoins to those of fiat currencies with an example.
For instance, sending $200 from the US to Colombia using traditional payment methods will cost $12.13. But stablecoins can make this transfer with a cost as little as $0.01. This is because traditional payment methods involve intermediaries, which charge costs for making a transaction.
The a16z blog post said the current global payment system consists of multiple intermediaries. Payment processors, acquiring banks, issuing banks, local banks, corresponding banks, foreign exchanges, card networks, etc. Each of them takes a cut, which makes traditional payments costly and slow.
Stablecoins are not only revolutionizing remittance payments but also boosting B2B payments. It took the case of a16z and said if the company makes a business transaction from Mexico to Vietnam, it takes 3 -7 business days to process it and costs around $15 for every $1000 transacted. Elon Musk’s SpaceX has already adopted stablecoins for its B2B transactions, avoiding delays and high costs.
The prevalence of stablecoin usage is what made them surpass a significant $200 billion market cap. The Ark Invest report published this year found that stablecoins recorded an annualized transaction value of $15.6 trillion in 2024. This makes 119% and 200% of the transaction volume of payment giants Visa and MasterCard, respectively.
This is not the first time a16z has published a report on stablecoin growth. In December last year, the venture capital firm published another blog post on stablecoins and their capability to dominate traditional global payments.
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