Opinion by: Simon Mcloughlin, CEO in Uphold
2021 witnessed a Fintech investment boom, with startups raising approximately $ 229 billion worldwide. Higher interest rates and lighter economic conditions are from overcoming excessive enlargement, but funds continue to pierce the sector. In fact, the global Fintech sector is expected to see a rebound on investment activity throughout 2025.
Why do investors continue to estimate this sector? The answer is simple. The current International Finance System is in the urgent need of modernization. Built for a pre-internet age, it depends on timely processes, chains of mediators and a patchwork of non-standard regulations.
An accumulation and expensive system
Get swift as a case to point. Established in 1973, Swift remains the backbone of cross-border payments. Swift is nothing more than a messaging system that gives banks to talk around with transactions. It is not designed to manage funds or process transactions. As a result, a “make and organize” approach has grown around international payments, characterized by the proliferation of mediators and local payment metals.
This antiquated, fragment system creates significant disputes with cross-border transactions, leading to delays, high cost and limited choice for individuals and businesses outside of major economic blocs. Fees for international payments are currently average of 1.5% for businesses and by all means up to 6.3% for remittances. Payments can take up to a few days to reach the recipients.
This system prevents global commercials and exacerbates financial exception, especially in the South global, where local currency and limited access to traditional banking services are common.
Many of these dispute points can be solved by Stablecoins, making it easy to transfer money to the boundaries of sending an email. In fact, blockchain -based money has the potential to change global finance.
Democratizing Access to Fiat Currencies
For people in countries with economic change or unstable governments, Stablecoins offer a safe shelter for thrift. Stablecoins are turned 1: 1 in a Fiat Currency like the US Dollar gives consumers in these regions a way to escape their national financial system with a trustworthy and clear alternative that protects them from inflation and money appreciation. This is especially important in the South, where economic instability can erase the amount of difficult income and savings.
According to UBSConsumers in the development of countries are also attracted to stablecoins due to the lower risk of government interruption in money. The wealth management firm believes that stablecoins are increasingly seen as “digital dollars” and used for everyone from stabbing to transactions to remittances in these regions.
Strengthening small businesses and freelancers
Stablecoins can significantly reduce the costs and complexity associated with international payments, enabling small businesses and freelancers that participate in the global market in a more level play. It opens new opportunities for entrepreneurship and economic growth in developing countries.
Recently: Dubai recognizes the USDC, EURC as the first stablecoins under the token regime
In our current payment system, physical money does not cross the boundaries – the information is only done. A payroll company looking to pay a freelancer in a third country cannot do this directly and should use systems such as stripe, which uses virtual bank accounts to surround the problem.
With Stablecoins, payroll companies can pay any money on any currency, using crypto on- and off-ramp to facilitate payment. Business pays dollars, for example, which is on Tether’s USDT ramp (USDT) and sent to the freelancer’s digital wallet, where they can keep it or off-ramp it with their local currency. Stablecoins will prove that, and, an important tool in helping businesses can access global talent and fill their gaps skills.
Financial integration
By offering an alternative to traditional banking systems, Stablecoins also provide financial services to non -generated populations. It can be a particular transformation of regions with limited access to traditional financial infrastructure or in countries such as Argentina, where there is a low confidence in the national financial system.
According to the Bank for International Settlements, Stablecoins can enable a wide range of payments and provide a gateway to other financial services, which resemble the role of transaction accounts as a rock step in greater financial integration.
Given their ability to provide access to financial services anywhere in an Internet connection, Stablecoins see an explosion of growth in emerging markets. Use cases are rapidly expanding across Africa, Latin America, and Asian formation components. This growth trajectory may expect to continue in recent years.
An arm shot for global business
Stablecoins are Rapidly rising to fame And there are more than $ 233 billion in market capitalization, while transaction volumes in 2024 reached $ 15.6 trillion, more than visas. In an increasingly uncertain world, they offer a stable, low cost and fast way of transferring money to boundaries, which helps to increase financial integration and proper access to global talent for employers. Stablecoins is a digital-first financial tool for a digital-world and is perfectly suited to changing the current Archaic International payment system.
Opinion by: Simon Mcloughlin, CEO in Uphold
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
