Remittances: A Case Study in Stablecoin Utility

On the medieval Silk Road, Chinese merchants used a system known as feiqian, literally “flying money.” Rather than transporting heavy metal coins across the mountains and deserts of Central Asia, traders deposited funds in one city and received a paper note redeemable in another. A precursor to modern banknotes, feiqian solved a specific problem in how a mobile merchant class could move capital safely and efficiently across long distances.

The problem of transferring value across borders is ancient, older even than feiqian, but most progress since has come in incremental waves. Western Union, for example, turned its expansive telegraph network into the first large‑scale wire transfer system by the late 19th and early 20th centuries, essentially layering money movement onto an existing communications grid. Over time, that same infrastructure of lines, settlement accounts, and storefront agents became the backbone of modern cash-based remittances. Or much more recently, digital-first players layered a better application on top of legacy plumbing i.e., correspondent banks, FX desks, local payout partners, and batch settlement systems which compressed onboarding, improved transparency, and lowered prices without fundamentally changing how value settles. Occasionally, however, these advances become staging grounds for something larger. Feiqian was both a better remittance mechanism and a prelude to paper money.

Why Stablecoin remittances solve an important problem

Stablecoin-based remittances occupy a similar position today. If feiqian was flying money, stablecoins are programmable money: value that moves instantly, carries logic, and interacts directly with software. Remittances are a compelling case study because the market is large and durable (fully capable of producing venture-scale outcomes) and also where the future of consumer money is being stress-tested as near-instant, rule-based, and less dependent on traditional intermediaries.

Why remittances? First, scale. Global remittance flows exceed $850b annually.² Major corridors from the United States run to Mexico, India, the Philippines, and Nigeria, while globally significant routes connect the Middle East to South Asia, Western to Eastern Europe, and Russia to Central Asia. For receiving countries such as El Salvador, Lebanon, and Honduras, remittances account for more than 20% of GDP.³

Second, dysfunction. Despite their importance, remittances remain expensive, slow, and full of friction. The underlying rails often look less like a modern feiqian and than its own precedent (hauling chests of coins): fragmented accounts, unpredictable settlement times, opaque fees, and value steadily lost to intermediaries, FX spreads, and slippage along the route.

This edition of The Current examines remittances as both a market and a proving ground. Drawing on original survey data from 275 U.S.-based remitters, it analyzes how money actually moves before, during, and after a transfer. Like the global remitting population, respondents send into both highly liquid, developed corridors (the U.K., EU, Canada) and less liquid, emerging markets. The near-term opportunity is to fix a dated system at meaningful scale; the larger opportunity is to make money itself programmable. To bring the case study to life, let’s trace the journey of a remittance.

Step 1: A cash flow problem/opportunity

Let’s think about remittances much more broadly than just the transfer. Remittances ultimately sit downstream of household cash flow. Before money ever moves across borders, it has to be formed i.e., earned and made available at the right moment. For many remitters, that process is fragile along two dimensions: timing and fragmentation.

Earnings arrive unevenly across jobs and platforms, especially for workers paid hourly or through gig payouts. Almost a quarter of senders say their income changes week to week. Depending on the employer or platform, holds, posting delays, and cutoff times mean different funding sources release money on different schedules. Remittance demand is equally inconsistent because household events like rent due dates, medical bills, tuition drive requests, not the sender’s pay cycle. Only 36% of respondents said they send a fixed amount every month; the rest adjust based on family requests or what they earned that period. Income, access, and need move on different timelines.

Even when timing aligns, liquidity is fragmented. The funds used for remittances rarely live in one place. Before a single dollar crosses a border, money sits scattered across our respondents’ accounts: 62% fund transfers from a U.S. bank account, 45% from a digital wallet like Cash App or PayPal, 35% from cash deposited at a money transfer store, 19% from a prepaid or payroll card, and 17% from gig‑app wallets. A sender may have enough money in total, but not in a single, transferable form. Funds get stranded in wallets that charge to cash out, bank accounts with low available balances due to pending bills, or cards that cannot fund certain transfers.

This fragmentation makes matching irregular earnings to fixed obligations and underwriting structurally hard. When balances and inflows are split across disconnected systems, no platform has a coherent view of household liquidity or the ability to act on it in real time. There is a clear opportunity to aggregate household liquidity and build services on top of it, such as:

• Unify balances across sources: bank accounts, wallets, prepaid cards, and gig payouts so available funds are visible and actionable

• Underwrite against future inflows, not just current balances, especially for earners with reliable income but unstable timing

• Offer availability guarantees (send now, pay later) where corridor risk and liquidity conditions allow

• Use stablecoins as a 24/7 liquidity layer, not a consumer-facing asset i.e., a neutral intermediate that makes funds usable instantly when banks are closed e.g., weekends, holidays, after hours

Step 2: A coordination problem/opportunity

If Step 1 is liquidity, Step 2 is coordination. For most senders, remittances start outside financial apps, usually in a message or a call. A request comes in, the sender asks what it is for, they agree on an amount, how quickly it is needed, and when it should arrive. In many ways, the transfer is the last step, not the first.

The survey highlights this coordination layer. When asked how they decide how much and when to send, 38% of respondents said they send when family asks for a specific amount, 36% send a fixed amount every month, and 18% send based on what they earn that pay period; only 8% primarily adjust based on the exchange rate. In other words, most remittances are driven by conversations and obligations rather than price or schedule.

That context currently sits off‑platform, and the gaps show up as friction. Communicating amount, timing, or purpose with the recipient is a top pre‑send pain point for 22% of senders, and 33% say they have to message or call family to confirm the money arrived. Similarly, validating that the transfer passed relies on screenshots and follow‑ups. And without context, platforms route and price transfers without knowing whether a payment is routine, time‑sensitive, or an exception.

More importantly, it leaves defensibility on the table. There are several opportunities to move upstream and integrate into the coordination layer itself:

• Visibility: Link requests to payments directly, replacing ad hoc screenshots and calls with a shared record of “who asked for what, when, and whether it was fulfilled.”

• Distribution: Insert the platform at the moment of request rather than just at execution

• Context: Capture structured signals about urgency, purpose, and repetition (rent vs gift vs emergency) and use them to drive pricing, routing, speed guarantees, and risk decisions

• Foundation for multi‑party products: Once coordination is established, platforms can support shared wallets, recurring obligations, conditional transfers, and household‑level views of who is contributing and who is drawing down

Step 3: A speed problem/opportunity

As for the transfer itself, instant delivery is the linchpin of value. It resolves the main risks in one move: it confirms completion, fixes the FX rate, and closes the loop between sender and recipient. Most other features are downstream of that delivery moment.

The survey makes this explicit. Instant delivery was the single most selected priority when choosing a provider (51% of respondents, out of eight options, allowed up to three choices), even ahead of “guaranteed cheapest exchange rate” at 41%. Other top picks like real-time tracking (38%) and guarantees against mistakes or scams (40%) point to the same concern which is to remove ambiguity at the moment of send. True instant settlement, or at least the credible ability to settle instantly when needed, is what makes those guarantees meaningful.

This also explains why price sensitivity drops under urgency. When a transfer covers rent, school fees, or medical expenses, respondents consistently favor known outcomes over slightly lower advertised fees. In those moments, senders choose providers they trust, even if they cost more. The market clears on certainty, not on the last few basis points. Cost still matters, but primarily once instant, predictable settlement and clear guarantees are already in place.

Step 4: A settlement problem/opportunity

Instant delivery only works if settlement does. On legacy rails, the two are tightly coupled: traditional remittance flows require local liquidity to be available at the exact moment the transfer settles. Funds move through a chain of intermediaries e.g., originating bank, aggregator, correspondent bank, local clearing partner each with its own cutoffs, prefunding rules, netting cycles. Liquidity sits idle in nostro and vostro accounts sized for peak demand rather than actual flows. When local markets thin out or timing shifts, settlement slows or fails.

Stablecoin remittance changes this by decoupling global settlement from local conversion. Settlement occurs the moment value moves on‑chain in a neutral, dollar‑denominated unit. Local liquidity constraints still exist, but they no longer block finality. Platforms can hold fully settled value and decide when and how to off‑ramp based on real‑time conditions.

Consider a remittance from the U.S. to Nigeria. On legacy rails, a debit in USD triggers a correspondent chain that assumes naira liquidity is available at the moment of settlement. If local FX markets thin or spreads spike, the transfer slows or stalls. From the sender’s perspective, the payment sits “pending,” even though the funds have already left their account.

In our example, USD is converted into a stablecoin and settles immediately; the platform now holds value that is globally fungible and final. Conversion into naira becomes a separate decision i.e., execute immediately if liquidity is available, wait if conditions deteriorate, or route through multiple local partners. The sender experiences certainty on the dollar leg even if local conversion happens minutes or hours later.

Stablecoins do not remove the hard part of connecting the middle mile to the last mile. Exotic currencies still have shallow FX and payout infrastructure in many corridors. But they let platforms separate two problems: settling value globally and deploying it locally. That separation can enable more agile, programmatic routing and risk management, rather than forcing every remittance to clear only when the weakest local link happens to be ready.

Step 5: A liquidity problem/opportunity

Settlement completes the transfer. Off‑ramping determines whether the recipient can actually use the money. This is where remittances fail most often. Funds have to land in a form the recipient can actually use like cash, a bank deposit, mobile money, or a bill paid directly. Which option is viable depends on the corridor, the institution, and the household, for example Oxxo in Mexico, mobile money in Kenya, or bank and bill pay in the Philippines.

Local execution is fragile because FX markets thin out, old school banks literally go offline, compliance has to be cleared, mobile money agents run out of float and stop paying out. None of this shows up in the UI, but it decides whether rent, school fees, or utilities get paid on time. The vulnerability of even the best upstream tech to local liquidity and partners means the real work is localization that looks like:

• Corridor‑native liquidity networks: Build and manage stablecoin and fiat liquidity specifically for target corridors (for example, US–MX, US–PH, Gulf–South Asia), including agent float, bank limits, and mobile‑money balances, sized and rebalanced to real flows

• Programmable payout routing: Route each remittance to the best mix of USD storage, FX, and local payout (cash, bank, mobile money, bill pay) based on corridor conditions, FX depth, and recipient preferences, instead of hard‑coding a single rail

Local regulatory footing: Secure and maintain the licenses, partnerships, and compliance stack required in each corridor so that off‑ramps are durable, not opportunistic

Step 6: A platform problem/opportunity

Remittances are a natural wedge into a two-sided, dollar‑denominated platform. On one side sits the sender, juggling fragmented income, volatile earnings, and competing obligations across borders; on the other side sits the recipient, trying to turn irregular inflows into rent, school fees, groceries, and emergencies. The same flow of funds has to solve for both sides’ liquidity, timing, and trust problems at once, which is exactly where a programmable USD balance can become a shared application rather than a one‑off transfer.

For the remitter, platforms can use transfer as a wedge to serve a notoriously difficult, albeit large, demographic. We can imagine platforms that unify home‑country and U.S. data to better underwrite immigrants or use AI to collapse the cost to serve a segment that often requires language support, non‑U.S. KYC documents, corridor‑specific compliance. 

For the recipient, a platform that facilitates remittances could look more like a shared, dollar‑denominated household account, with USD as default. In fact, 36% of senders explicitly want funds to arrive and keep their value in dollars which I interpret more as recipients want maximum flexibility. Local‑currency off‑ramps be it hard cash, mobile money, bank accounts could sit on top of that balance rather than replacing it, especially in high‑inflation environments.

Parting thoughts on stablecoin remittance

A few parting thoughts on the category.

Programmable money actually matters here: Programmability creates the most value in systems with repeated coordination, timing mismatches, and high cost of failure. Remittances concentrate all three, which naturally opens the door to financial services that can for example, draft and negotiate household-specific financial products or savings strategies, route payments intelligently, eventually overlay transactional agents

Corridor depth will beat global breadth: The right strategy is select corridor(s) done extremely well rather than marginal benefit globally. Depth means dense off‑ramps, merchant and bill‑pay networks, corridor‑specific compliance, risk models tuned to local idiosyncrasies. It also means recycling corridor feedback into product design e.g., in markets where recipients are comfortable holding stablecoins, the balance product can default to USD savings; in markets where people immediately cash out, the focus shifts to bill pay, direct merchant payouts, and minimizing FX and cash‑out friction

Coordination UX is as important as rails: Since 38% of senders primarily respond to family requests and only 8% mainly optimize for FX according to our survey, the interface for asking, confirming, earmarking, and tracking matters as much as the infrastructure itself. The opportunity is more than the transfer, because the transfer is just a leg of the larger intent and the spend around it e.g., who requested what, which obligations were funded, which bills were paid, and what remains available

The only constant is change. Reach out to hworland@nea.com to continue the conversation.