Cross-border payments often face two persistent challenges: lengthy settlement times and currency fluctuations. A single transaction can take one to five days to process through multiple intermediary banks. In that time, shifts in exchange rates can significantly impact a company’s bottom line. Stablecoins are beginning to offer a potential solution. By removing intermediaries, these digital currencies allow funds to move almost instantly, even within an app.
On May 21, the Hong Kong government passed the “Stablecoins Bill,” which will take effect on August 1. Major companies such as Ant Group, Standard Chartered, and JD.com are already exploring applications, with some targeting cross-border payments and others focusing on B2B transactions or specific markets across Asia Pacific and Africa. The range of use cases is still evolving.
Still, key questions remain. What underpins a stablecoin’s value? How do they differ from older cryptocurrencies like Bitcoin? And what specific advantages do they offer over traditional cross-border payment systems? To shed light on these issues, 36Kr spoke with Jiang Bo, a cross-border business expert at a major financial institution, about how stablecoins are developing and what their international prospects look like.
The following transcript has been edited and consolidated for brevity and clarity.
36Kr: Why are stablecoins gaining momentum now, and why has Hong Kong chosen this moment to launch a new regulatory framework?
Jiang Bo (JB): Delays and currency volatility have long created friction in cross-border payments. Transfers from overseas banks to domestic accounts can take days, and even a brief delay can affect profit margins for large companies. Stablecoins aim to address these issues.
Hong Kong’s framework is a response to two developments: a desire to reduce dependence on the US dollar and other global currency systems, and a more mature market that is now ready to adopt stablecoins commercially.
36Kr: What sets stablecoins apart from cryptocurrencies like Bitcoin? How do they maintain price stability?
JB: Bitcoin is decentralized and not backed by physical assets, which makes it volatile. In contrast, stablecoins are pegged to fiat currencies or high-value assets. Issuers are required to deposit equivalent reserves in regulated banks. This reserve model supports the coin’s price stability.
36Kr: Why is Ant Group focusing on Hong Kong, Singapore, and Luxembourg for its stablecoin efforts?
JB: These markets have relatively advanced financial systems and clear regulatory frameworks. Hong Kong has introduced specific rules for stablecoins, Singapore encourages financial innovation, and Luxembourg provides a gateway for compliance in the EU. These locations are considered conducive environments for stablecoin pilots.
36Kr: As more companies enter the space, how will their stablecoin offerings differ?
JB: JD.com, through Jingdong Coinlink Technology, is developing a stablecoin to facilitate trade across the Asia Pacific, Middle East, and Africa. It enables rapid transactions with suppliers, with settlement times measured in minutes.
Ant Group is focusing on cross-border finance and supply chain payments. Ant International, for example, is exploring ways to streamline these services. Standard Chartered is concentrating on cross-border B2B payments.
36Kr: How do the challenges faced by large enterprises differ from those encountered by small and medium enterprises in cross-border transactions?
JB: Large enterprises prioritize minimizing exposure to exchange rate fluctuations, especially for high-value transactions. Speed of settlement is also key. Small and medium enterprises, by contrast, often focus more on reducing transaction fees.
36Kr: How do stablecoins improve efficiency and reduce costs compared to traditional systems?
JB: Stablecoins enable direct, real-time transfers without the need for intermediary banks. Funds can be transferred point to point in real time. Eventually, users will be able to transact directly in apps using stablecoins. Cross-border settlement could take just minutes, representing a game changer for cross-border sellers. For instance, Amazon merchants typically face a payment cycle spanning 7–15 days. Faster settlements mean steadier cash flow and better capital utilization.
Costs are also lower. Stablecoin transaction fees are typically a fraction of those associated with conventional systems. From what we’ve seen, this makes them especially attractive for businesses handling high volumes of small transactions, such as cross-border e-commerce merchants and digital services providers.
36Kr: With more than 300 stablecoins in circulation, what should companies consider when selecting one?
JB: Companies should align their choice with their specific business needs. Some stablecoins are designed for speed, others for specific currency pairs or trading strategies.
Two main criteria to consider are regulatory backing and liquidity. Is the issuer licensed and recognized by a government authority? Can the coin be quickly converted to fiat? Coins like USDT and USDC offer same-day liquidity, making them practical for everyday use. Companies can find this information on issuer websites or consult with financial institutions for guidance.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Feng Yaling and Yang Yuexin for 36Kr.