Remember the old days when calling or sending a message via text outside the country cost money? With the help of modern messaging apps like WhatsApp, paying for cross-border calls and texts is now obsolete. For money transfers, stablecoins might do just that: democratize the payments industry by eliminating historical gatekeepers, says venture firm Andreessen Horowitz (a16z). "Just as WhatsApp disrupted costly international phone calls, blockchain payments and stablecoins are transforming global money transfers," the firm said in a blog post on Wednesday . The current global payment infrastructure is a complex web involving points of sale, payment processors, acquiring banks, issuing banks, correspondent banks, foreign exchanges, and card networks. Read more: What Is a Stablecoin? To make matters more difficult, each of these intermediaries charges fees and introduces delays, making international transactions cumbersome. For instance, a16z says remittance fees can reach up to 10% — just like cross-border calls or text used to be restrictive before instant messaging apps came into play. Enter blockchain and stablecoins — cryptocurrencies pegged to assets like the U.S. dollar. "Stablecoins offer a clean-slate alternative. Instead of stitching together clunky, costly, and outdated systems, stablecoins flow seamlessly on top of global blockchains," the blog post said. "Already, stablecoins are slashing the cost of remittances: Sending $200 from the U.S. to Columbia using traditional methods will cost you $12.13; with stablecoins, it costs $0.01." And, it's not just remittances where stablecoins are eliminating inefficiencies; this could help boost B2B payments on a massive scale, too. A16z uses business transactions from Mexico to Vietnam as an example, which take three to seven days to process and cost anywhere between $14-to-$150 per $1000 transacted. These pass through as many as five intermediaries along the way, each of which takes a cut. The adoption of stablecoin could make such transactions nearly free and instant, it says. Some corporations have taken notice, and Elon Musk's SpaceX is already using stablecoins to manage their corporate treasuries to shield itself from FX volatility. So, it shouldn't surprise anyone to see that the total market cap of stablecoins has passed $200 billion or that the annualized transaction value of stablecoins in 2024 hit $15.6 trillion — roughly 119% and 200% that of Visa and Mastercard , respectively. However, the rise of stablecoins isn't without challenges. Regulatory bodies have scrutinized their use, making it "incredibly difficult" to bridge traditional finance to stablecoins, said a16z. The landscape is now finally evolving, as policymakers are now actively shaping rules to recognize and regulate stablecoins in the U.S. "A forthcoming bill clarifying this regulation could pave the way for even broader adoption and integration into the global financial system," the blog said. With the rapidly changing landscape for finance and crypto becoming more mainstream, stablecoins could become the transformative force that revolutionizes the future of money. "Just as WhatsApp disrupted costly international phone calls, blockchain payments and stablecoins are transforming global money transfers," added a16z. Read more: U.S. House Committee Advances Stablecoin Bill, While Dems Warn of Trump Conflicts
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