Cross-border payments: how blockchain closes the gap
Cross-border settlement traps liquidity and overloads ops teams. Learn how blockchain and stablecoins help treasury teams cut delays and trapped liquidity.
Cross-border settlement is a daily set of tradeoffs between speed, certainty, and operational load. Teams must deal with different operating hours and cutoffs, several chains of intermediaries, duplicated controls, delayed finality, and manual exception handling. In this context, treasury teams are wasting money on trapped liquidity due to delayed settlement and on larger buffers than is actually needed.
Why is cross-border settlement still so inefficient?
Cross-border payments are a global policy priority across cost, speed, transparency, and access. The G20 has set explicit quantitative targets for improving outcomes, including cost targets for retail payments by the end of 2027.
But cross-border settlement involves many moving parts, and that makes the issue hard to solve. As of March 2025, the World Bank estimates the global average cost of sending remittances at 6.49%. While remittances are a retail use case, this is a useful benchmark for what “inefficiency” looks like at scale when transfers have to cross borders.
It all starts with the timing. When finality is uncertain and settlement timing slips, treasury teams need larger prefunding and buffers. Liquidity gets trapped, and the risk surface grows because value and records move across separate systems that still need to be reconciled.
Then, there is the operational load: investigations, repairs, and reconciliation across multiple ledgers and sources of truth. Add to this the compliance element: international sanctions, AML, travel rule, local controls, and documentation expectations, multiplied by the number of involved jurisdictions.
Blockchain opens the door to always-on settlement, shared state, and programmable controls.
How blockchain improves cross-border settlement
The benefits of blockchain for cross-border treasury
Blockchain provides always-on rails: settlement doesn’t need to wait for local cutoffs anymore.
Blockchain allows for a shared state across parties. Counterparties are less likely to lose information, and reconciliation becomes simpler and more automatable. This is largely enabled by atomicity and programmability. In practice, a single transaction can include conditional checks and coordinate settlement to reduce inconsistencies. With Hyli’s zero-knowledge proof composition, those checks can be proven without exposing sensitive underlying data, such as what rule was satisfied or which documents were used.
Finally, blockchain offers audit trails and verifiability. On public ledgers, traceability often implies broad visibility, which clashes with confidentiality needs in regulated finance. Selective disclosure changes that tradeoff by enabling parties to prove compliance, controls, or accounting facts without publishing the underlying sensitive data, as implemented by Hyli.
Alex Sirac
Stablecoins as the main mechanism for cross-border transfers
Blockchain is not a payment instrument by itself, but only a settlement substrate. Stablecoins are the simplest way to use it today.
A stablecoin is a digital representation of cash, issued under a defined legal and operational framework, and transferred onchain or across a permissioned network. In practice, this means you can settle value with near-continuous availability, fast transfers, and an inherent audit trail.
That combination is the true value of stablecoins for cross-border settlement. It reduces cutoffs, status chasing, and manual follow-ups so teams can focus on executing and controlling transfers.
For institutional-grade stablecoin usage, though, a lot of conditions must be met. Issuers need clarity on backing, redemption, and reserve risks. They also need a clear compliance model that includes screening, monitoring, and reporting.
Stablecoin flows must map cleanly into treasury tooling and accounting workflows, including reconciliation and reporting. This operational integration is what makes them viable for institutional use cases.
Finally, the liquidity must be predictable. If liquidity is thin or fragmented, onchain speed doesn’t translate to real-life transaction speed, and that can bring new delays and risks. Thankfully, the largest stablecoins already trade at meaningful scale, with CoinMarketCap reporting over $100B in 24-hour stablecoin trading volume (as a category) at the time of writing.
Beyond stablecoins: what comes next for onchain cross-border payments
Stablecoins are the most viable solution right now. But several solutions may expand alongside them and give us more onchain affordances for cross-border transactions.
Tokenized deposits could mimic the current balance-sheet models for easy value transfers.
Fast payment systems could easily interlink with a composability layer, connecting domestic instant payment rails for easier retail and institutional usage.
Eventually, blockchain will offer several corridors according to urgency, value, and compliance profiles. There will be a tailor-made solution for each type of transfer, and we need future-proof infrastructure that can easily be expanded on, such as Hyli’s privacy layer.
In practice: a transfer between EU and GCC entities
An EU-based corporation needs to move liquidity to Qatar to fund local operations, pay suppliers, and rebalance cash positions. This must be done while managing multi-currency exposure between EUR, USD, and QAR, time zone mismatch and cutoffs, variable fees, and compliance checks that span two regulatory regions.
Today, a transaction can take hours, sometimes days, to reach finality. This uncertainty forces larger buffers, and cash stays stuck in transit or held back longer than necessary.
This capital trapped in transit is a waste of resources. In 2024, DTCC's clearing fund dropped by $3 billion (23%) within three months of T+1 implementation compared to T+2: that capital buffer can now be deployed and invested.
On top of this loss, status uncertainty drives manual work. Operational teams spend time investigating where each payment sits in the chain of intermediaries and how it maps to internal records. Coordinating execution and accounting across systems is complex and expensive.
With reliable blockchain infrastructure, the receiving entity can receive funds faster and with more predictable ETAs. Both sides deal with fewer exceptions. This reduces the need for prefunding and operational buffers, while preserving end-to-end verifiability that supports audit and internal controls.
Cross-border finality becomes more predictable. Treasury teams can run transfers safely, repeatedly, and at scale. Stablecoins are the main mechanism today, as the market focuses on lower operational load, clearer risk management, and better liquidity mobility. Hyli offers infrastructure for verifiably compliant stablecoins.
Build verifiably compliant cross-border transfers on Hyli. Get in touch with our team.