BCRemit sees banks retaining cross-border payment role

The company reports 90% lower cross-border fees, but conventional currencies remain essential to international transactions.

Stablecoins could reduce cross-border payment costs and settlement times, but they are unlikely to replace traditional banks as businesses still depend on conventional currencies, according to BCRemit.

Gio Calma, Co-Founder and Director of BCRemit, said stablecoins could complement existing banking services rather than displace them.

"Stablecoins are really innovative, but we still have a need for fiat. Hence, we still need the banks," Calma said.

He explained that stablecoin-based transfers currently use the sandwich model, in which funds are received in conventional currency, converted into stablecoins for international transmission, and exchanged back into conventional currency in the receiving country.

The arrangement allows businesses to use blockchain networks whilst retaining conventional currencies at both ends of a transaction.

"But going back to your question, I think that stable coins won't replace the banks. In fact, I think banks should adopt stablecoins because it complements their services," Calma said.

Traditional cross-border payments commonly use the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, which Calma said remains reliable but has disadvantages involving costs and processing times.

"Swift transfers could take about one to three business days, and it's only available on business days. Meaning, in reality, Swift transfers could take as long as five days," he said.

BCRemit, which has processed more than US$1b in cross-border transactions, is testing stablecoin-based transfers to improve payment efficiency.

"We're able to lower our cross-border fees by about 90%. At the same time, we're able to fully reap the benefits of stablecoins, meaning we're able to offer our customers and clients real-time transfers and 24-seven availability," Calma said.