Analyzing the stablecoin "Sandwich": A New Approach to Reshaping Global Capital Flow

Stablecoins, as the most representative practical tool in the field of digital currencies, demonstrate the potential of blockchain to provide a new and efficient infrastructure for traditional financial payment systems. Recently, the total market value of stablecoins has significantly increased, now exceeding $250 billion, facilitating the efficient circulation of trillions of dollars in global payment funds.

Industry insiders understand that the value of stablecoins lies in embodying the core capability of blockchain to "instantly transfer funds and value," making it possible to build commercial closed-loop payments on-chain. However, real enterprise-level payment scenarios are far more complex than simple peer-to-peer transfers.

Currently, enterprise-focused stablecoin applications often adopt the "stablecoin sandwich" architecture, which replaces traditional payment channels with horizontal value/fund transfers via blockchain, while still relying on traditional financial payment systems at both ends. Although this design has brought improvements, it also limits the full utilization of blockchain advantages.

This article will explore how stablecoins are applied in global cross-border payments from the perspective of global fund transfers, including:

1. Analyze the existing global cross-border payment system;
2. Analyze the specific improvements of the stablecoin sandwich architecture in fund management, B2B payments, and card network settlement;
3. Discuss how to overcome the challenges at both ends of stablecoin sandwich and fully realize the value of blockchain.

1. Background of Stablecoin Payments

B2B corporate payments are the most striking area of stablecoin applications. Recent data shows that monthly B2B corporate payment amounts have grown from 770 million USD to 3 billion USD. Stablecoins account for nearly half of the transaction volume on certain payment platforms, with about 49% of customers actively using stablecoins for payments.

The internal data of leading companies can better reflect the scale of the segmented market. The annual processing volume of some leading companies is about 15 billion USD, with approximately half coming from B2B enterprise payments. Some companies estimate that their annual transaction volume accounts for about 20% of the global B2B stablecoin cross-border payment market.

The use of global payments is becoming increasingly popular, primarily because the advantages of blockchain-based stablecoins become more prominent when traditional financial payment infrastructures appear outdated. Although traditional systems facilitate over $100 trillion in global payment volume each year, businesses and banks still face significant complexity and delays.

2. Various Models of Global Cross-Border Payments

2.1 Bank infrastructure based on SWIFT

The SWIFT system is responsible for transmitting transfer instructions between banks, while the actual flow of funds only occurs between banks that have pre-established correspondent accounts. If the parties have not established a direct cooperative relationship, fund settlement must be completed through an agent bank.

This model may lead to issues such as settlement times lasting several days, increased costs, and difficulties in tracking. Even cross-border payments between neighboring countries with underdeveloped financial infrastructure require routing through other banks, causing significant inconvenience.

2.2 Cross-border Fund Pool Model Based on PSP

The cross-border payment provider (XBMT) offers "global multi-currency accounts" or "local collection accounts" services, allowing businesses to make global payments without directly using SWIFT. Its core is to provide businesses with a multi-currency fund pool, enabling flexible payments between different countries.

XBMT operates in a closed-loop model, preparing and scheduling the required liquidity in advance, and then distributing it to customers on demand. Although it superficially provides an instant arrival experience, its speed and scale are still limited by the available liquidity in specific countries and the clearing timeliness of the underlying settlement rails.

2.3 stablecoin model

Stablecoins leverage blockchain technology to reconstruct the operation of internet commerce. Their settlement cycle is equivalent to the block time of the issuing blockchain, significantly enhancing the settlement speed. More importantly, stablecoins are usually deployed on smart contract platforms, enabling innovative systems and workflows that traditional banks cannot achieve.

From a macro perspective, faster and more interactive financial payments can directly promote global GDP growth. When the settlement cycle is compressed from "days" to "seconds" or "minutes", its ripple effect will impact the entire economy. At the same time, the existence of verifiable standards allows financial innovation to occur globally without permission for the first time.

3. The Application of Stablecoins in Global Payments

3.1 Corporate Fund Management

In traditional models, companies need to prepare funds in advance, considering settlement delays and foreign exchange risks. Stablecoins simplify this process and eliminate the need to control international settlement delays. Although initial deposits and final withdrawals still need to touch the fiat currency system, stablecoins make the flow of funds between both ends smoother.

3.2 B2B enterprise payment

In B2B payment scenarios, the benefits brought by stablecoins are greater. They provide clear, real-time payment status monitoring, which can be directly linked to time-sensitive delivery points, reducing risk and capital costs. The entire process has been compressed from the previous 3 days to just a few seconds, and there is no need to consider market closures, significantly simplifying the operational funding requirements.

3.3 Card Organization Network Settlement

Some card organizations have begun to experiment with using stablecoins for settlements between acquiring banks and issuing banks. This method replaces traditional wire transfer processes, completing transactions using stablecoins on the blockchain. It reduces the capital requirements needed for timely international transfers, avoids foreign exchange risks, and lays the foundation for financial innovation among banks within the network.

4. Looking to the Future

Currently, most stablecoin applications still remain within the "sandwich" structure itself and have not been able to break through further. The real challenge lies in how to get rid of this structure and build a financial service ecosystem that is completely on-chain.

The ultimate goal of stablecoin payments is to completely eliminate the fiat currency links at both ends. Once businesses and consumers fully embrace stablecoins, the entire financial and commercial cycle can be completed on the blockchain, no longer constrained by traditional payment systems. This will unleash unprecedented commercial scale, significantly reduce global business friction, and bring the global GDP growth curve closer to the real consumption speed of the internet era.

The essence of future payment finance ( PayFi ) is to combine stablecoin payments with on-chain financial services. If we can completely break free from the sandwich structure and build more on-chain financial services at both ends, the speed of global capital/value circulation will reach a whole new height.