Stablecoins and the Future of Cross-Border Payments

Tokenization, the process of turning a sensitive, real-world asset — such as money — into a digital representation, or token, has profound implications for improving liquidity, speed, efficiency and transparency in payments. As tokens take root in the world economy, many financial institutions are in the process of implementing or considering issuing stablecoins, a form of proprietary digital currency that is intended to uphold a stable value, making it a reliable payment option for businesses. The benefits of stablecoins include:

• Price Stability: Aiming to maintain a constant value, and thereby reduce volatility compared to other forms of digital currency, stablecoins are often pegged to a government-owned currency. For example, a developing regulatory framework establishes 1:1 U.S. dollar (USD) backing for stablecoins.
• Liquidity and Accessibility: Stablecoins offer a reliable medium of exchange and store of value that are suitable for everyday transactions. Transactions in any currency can be made 24 hours a day, seven days a week, 365 days a year, and can be settled nearly instantaneously. This is a vast improvement compared to traditional payment methods that can take hours or days, or perhaps longer for foreign transactions.
• Transparency and Accountability: Stablecoins use blockchain technology — essentially, a public digital ledger that securely stores transaction data across a computer network. Utilizing its unique features of decentralization and transparency, users can perform real-time audits to verify transaction activity and track cash flow. Stablecoins can also be integrated with smart contracts, which are computer programs that automatically check information and execute transactions in the blockchain. Additionally, there have been early efforts to address consumer protections in the evolving regulatory environment.

Cross-Border Potential

Along with benefits that can increase business efficiency and reduce volatility, stablecoins have large potential to upgrade cross-border payments, whether they are foreign exchange transactions or USD payments. Businesses that frequently transact with global vendors, pay employees and contractors who are based outside the U.S., or perform services for overseas entities may encounter common issues, such as slow transfers, burdensome “middlemen,” costly fees and opaque transaction processes that create opportunities for error or fraud.

With the promised use cases of stablecoins, however, businesses can bypass the intermediaries involved in international transactions. The parties do not even need traditional bank accounts in the respective countries because stablecoins can be deposited into or sent from digital wallets.

Meanwhile, the infrastructure for wider stablecoin adoption in cross-border payments is rapidly building. A new international messaging standard for payments, ISO 20022, was implemented by many institutions in 2025, enabling banks to more easily adopt new services, including stablecoins. The bank-owned cooperative that manages the messaging network, SWIFT, recently launched a service to enhance cross-border payments and is developing its own blockchain technology to support stablecoins and tokenized deposits. It all adds up to an emerging international payment ecosystem that will be more accommodating to digital currencies in the near future.

Are Stablecoins the Future of Payments?

Innovation almost always challenges an industry’s status quo, and often a more efficient and more accessible solution will displace established processes. Concerning stablecoins, the option is more likely to enhance the existing global payment structure than eliminate it.

Financial institutions of all sizes recognize that reality, and many are in different stages of planning for or developing their own stablecoin solutions. As a leader in innovation, demonstrated by past adoptions of tools and protocols that provide modernized and secure transactions, FNB is also taking steps to embrace the future of payments and ensure that clients soon have better flexibility and connectivity than ever before.

About the GENIUS Act

In 2025, Congress passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which was then signed into law with the intention to set industry standards and protect consumers as stablecoins increasingly enter the mainstream. Among the law’s key provisions:

• Definitions: The GENIUS Act defines a “payment stablecoin” as a digital asset used as a means of payment or settlement and redeemable for a fixed amount, but not digital assets that are national currencies, bank deposits or securities under federal securities laws.
• Permitted Issuers: The act limits issuance to “permitted payment stablecoin issuers” (PPSIs), including banks, credit unions and qualified non-bank entities.
• 1:1 Reserve Backing: Stablecoins must be fully backed by high-quality, liquid assets, such as cash, government securities or deposits at insured institutions.
• Oversight, Protection and Security: The legislation outlines certain federal and state regulatory oversight structures, ensures stablecoin holders have priority in the event of issuer insolvency, and addresses national security and anti-money laundering (AML) concerns.