Uttam Kumar is the engineering manager at American Eagle Outfitters. Retail technology leader. Advocate for seamless customer experiences.
Traditional cross-border payments have long been plagued by high costs, slow speed and opaque tracking due to multiple correspondent banks, foreign exchange conversions, patchwork settlement windows and a lack of transparency. Many retail remittances, for instance, still carry costs averaging 6% and take several business days to settle.
Every delay in settlement or any lack of visibility creates integration complexity, reconciliation errors and customer dissatisfaction. With digital commerce and real-time expectations as the new normal, merchants and corporations now judge cross-border rails by the same standards as domestic rails: fast, cheap, transparent and available 24/7.
The impact of these inefficiencies extends beyond finance departments. CIOs and CTOs are also under pressure to deliver seamless, real-time cross-border payments while ensuring compliance and cybersecurity across multiple jurisdictions.
To deliver this outcome, many technology leaders are now exploring three trends to achieve real-time, cross-border payments: stablecoins, central bank digital currencies (CBDCs) and tokenization. Let’s understand these trends before exploring how technology will need to adapt to meet the new expectations for cross-border payments.
Stablecoins: Private-Sector Rails For A Globalized World
Stablecoins—digital assets pegged to fiat currencies or reserves—are emerging as an unexpected contender for cross-border settlement. According to Visa, global stablecoin transaction volume grew to $5.7 trillion in 2024, which shows substantial adoption even if it currently only accounts for less than 4% of global payments.
Stablecoins are compelling for a few reasons. They offer:
• Faster settlement (minutes, not days) due to blockchain rails
• Lower cost by bypassing multiple correspondent banks
• 24/7 availability with global reach
For example, a legacy cross-border wire from USD to EUR via three banks might take two to three days with a 2% to 4% fee. With a USD-pegged stablecoin, settlement can happen in minutes at a fraction of the cost.
But stablecoins are not without risk, as the Bank for International Settlements points out: Regulatory gaps, questions about reserve backing and the potential for “stealth dollarization” (where non-U.S. jurisdictions rely heavily on dollar-denominated stablecoins) all loom large.
CBDCs: The Sovereign Response To Stablecoins
While stablecoins are private-sector innovations, central banks are responding with their own digital money initiatives.
Project mBridge is a prime example. The project is a multi-jurisdictional distributed ledger technology (DLT) platform involving the Bank for International Settlements, China, Hong Kong, Thailand, the UAE and Saudi Arabia that reached “minimum viable product” status in mid-2024.
CBDCs promise digital fiat money, settled on-ledger that has the potential to be programmable, interoperable and global. Along with Project mBridge, more than 134 countries are exploring CBDCs. Tokenization of commercial bank deposits and real-world assets is also gaining traction, turning money and assets into ledger-native tokens.
Meanwhile, the digital rupee in India surged in circulation to ₹10.16 billion (about $122 million) by March 2025, up 334% YoY. China’s digital yuan pilot had transaction volumes of about 7 trillion yuan (about $986 billion) by mid-2024 across 17 provinces.
By enabling real-time settlement in tokenized central bank money, CBDCs can bypass legacy correspondent chains and their T+2 or T+1 model entirely, which could reshape global cost and settlement architecture.
Tokenization: Assets, Money And Rails Converge
Tokenization is the process of representing a real-world asset—such as a commercial bank deposit or other form of money—as a digital token on a blockchain or distributed ledger. Think of it as creating a digital wrapper for value.
This process means the final settlement can occur in the same digital environment that holds a tokenized asset. This collapses multiple steps (trade, settlement and delivery) into one, which can reduce counterparty risk and friction.
For tech leaders, tokenization opens the door to programmable money. This means you can integrate logic directly into the payment itself, such as: “only release payment when a shipment is verified” or “automatically calculate and remit taxes/fees in real-time.” This level of control and automation can transform a company’s financial compliance and payment operations.
At the Sibos 2025 conference, 87% of financial institutions surveyed said they are exploring tokenization and tokenized deposits as complementary tools to CBDCs and stablecoins.
What This Means For Tech Leadership
Legacy payment infrastructures were not built for tokenized money, real-time settlement or programmable financial logic. Technology executives must, therefore, understand that these developments are not just financial or regulatory but also deeply architectural.
Here are some best practices that can help organizations overcome common challenges and adapt their systems, partnerships and governance structures to this new era of programmable value movement:
1. Treasurers and CFOs must re-architect payments. Payments aren’t just “end-of-chain” anymore. They’re part of a composable stack that includes wallets, tokenized money, chains and asset flows.
2. Liquidity and settlement strategy must evolve. When money can arrive in seconds or minutes, traditional float and netting models become less effective. The cost of delay becomes explicit.
3. Partnerships shift. Banks must partner not only with fintechs but also with infrastructure providers, distributed ledger technology (DLT) platforms and tokenization specialists.
4. Risk, compliance and regulation must remain center stage. Stablecoins and tokenization bring new counterparty, reserve and operational risks. CBDCs also bring national-sovereign risk and legislative uncertainty.
5. Global strategy is mandatory. Cross-border still means cross-rail. Regional rails will increasingly connect via tokenized money, and banks must architect for multirail, multijurisdiction flows.
For technology leaders, the priority is building secure, adaptable systems that can operate across jurisdictions and rails. The goal is not just efficiency, but readiness for a more connected digital economy.
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